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How to safely reduce CPA bids?

Visitor ✭ ✭ ✭
# 1
Visitor ✭ ✭ ✭

I posted last week about a "broken" campaign thanks to an incompetent PPC agency. Before they took over it was delivering around 200 conversions/day at about $3.50/conversion, then after they made a mess of it, it was down to around 80 conversions/day at around $5.50/conversion. Conversion rate in both cases is around 30%. The cause of the traffic loss was a sudden decrease of Target CPA from $4.50 to $3.00 which killed traffic almost instantly.

 

After getting rid of them I have been frantically trying to get the traffic level back up, without success, but after hours and hours of research last week I came up with some answers. Here are two problems that, having been addressed, have restored traffic & conversions to even higher levels than before (as a side note, I went to manual CPC bidding for a few days to try and clear data from the optimizer, which seemed to help): 

 

1. In trying to get traffic back up I kept increasing daily budget with the hope that this would work. However, my experience and the experience of others shows that increasing budget on a less-than-optimized CPA campaign merely causes AdWords to start throwing more junk traffic at it, which means lower conversions, which means it starts to limit itself, causing a downward spiral. 

 

I cut the budget back to an even lower level than before and suddenly the traffic & conversion volume is back at an astounding near-40% conversion rate.

 

2. Going back through account history, the initial drop in traffic came when bidding was changed from Max CPA to Target CPA. Moving back to Max CPA at the recommended bid did the trick. I found more than one other AdWords manager who experienced traffic drops with Target vs. Max CPA.

 

So that's the good news! The bad news is that while I have my 200 conversions/day back, they're coming at that same $5.50-ish CPA, due to the high initial Max CPA bid, which is unsustainable for the long term. So, I want to *SAFELY* lower my CPA bid, to get back to reasonable levels (no more than $4.50 tops, preferably sub-$4.00) but without killing off traffic.

 

One recommendation I saw was to do it at .10 per day. This is obviously the slow route, but it won't kill off traffic.

 

What suggestions do anyone have as to doing this safely - in other words, getting back down to desirable CPA, without killing traffic? 

1 ACCEPTED SOLUTION

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Marked as Best Answer.
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Accepted by Mini-CM (Community Manager)
September 2015

Re: How to safely reduce CPA bids?

[ Edited ]
Explorer ✭ ✭ ✭
# 2
Explorer ✭ ✭ ✭

While reading learning center for my adwords exam which I cleared last week, I came across these points.

1- If you planing to use CPA bid, then go with recommended CPA bid by the system, which You have already done later. It will help you to keep pace with current performance. 

2- Initially, your cpc might be higher till adword system reset its data. So, if its just few days, you need to give it little time and I hope, your average Cost/conversion will decrease further.

View solution in original post

Marked as Best Answer.
Solution
Accepted by Mini-CM (Community Manager)
September 2015

Re: How to safely reduce CPA bids?

[ Edited ]
Explorer ✭ ✭ ✭
# 2
Explorer ✭ ✭ ✭

While reading learning center for my adwords exam which I cleared last week, I came across these points.

1- If you planing to use CPA bid, then go with recommended CPA bid by the system, which You have already done later. It will help you to keep pace with current performance. 

2- Initially, your cpc might be higher till adword system reset its data. So, if its just few days, you need to give it little time and I hope, your average Cost/conversion will decrease further.

Re: How to safely reduce CPA bids?

Participant ✭ ✭ ✭
# 3
Participant ✭ ✭ ✭

Hi

 

This is clearly a case where the experiments-function can be useful

Re: How to safely reduce CPA bids?

Visitor ✭ ✭ ✭
# 4
Visitor ✭ ✭ ✭

Hi David,

 

Thanks for the tip on experiments - I hadn't previously thought of that. 

 

Frank

Re: How to safely reduce CPA bids?

Follower ✭ ☆ ☆
# 5
Follower ✭ ☆ ☆

@ TheROTTeam10

 

So let me see if I got this right,

 

40% Conversion Ratio, 200+ conversions/day @ 5.50 CPA = unsustainable??

 

You've increased your daily conversion ratio by 10% (FROM 30% which is umm...)

 

And you're worry about traffic still?

 

What is your Avg. Order Value?

 

What is your Revenue Threshold?

 

What industry are you in? Who, what, when......

 

Please excuse me while I regurgitate my lunch... Smiley Happy 

 

 

 

Re: How to safely reduce CPA bids?

Visitor ✭ ✭ ✭
# 6
Visitor ✭ ✭ ✭

These are signup conversions, not sales.

 

At the old $3.50 or so it was hugely profitable.

 

At $5.00 it breaks even.

 

At the current CPA I am losing money.

 

Hopefully that clarifies it.... 

 

Re: How to safely reduce CPA bids?

Participant ✭ ✭ ✭
# 7
Participant ✭ ✭ ✭
Maybe you could turn off the machine, go for manual bidding, launch an erperiment with different bid levels and let us know what is happening.

Re: How to safely reduce CPA bids?

Follower ✭ ☆ ☆
# 8
Follower ✭ ☆ ☆

Hi all,

 

I have a question for you regarding this topic.

 

I currently have two campaigns targeting both Search and Display. I have been advised to separate both targets and create a new campaign for one of the two targets.

 

As both campaigns are converting at a desired CPA value (My bidding is currently Target CPA) I would like to make sure if I am doing the right thing to split them up. If there is a way for me to safely separate both targets would 'Experiment' be my best bet when launching a new Campaign? (I prefer to move both my Display Targeting to a new Campaign)

 

Thank you,

Re: How to safely reduce CPA bids?

Explorer ✭ ✭ ✭
# 9
Explorer ✭ ✭ ✭

@Wicked wrote:

Hi all,

 

I have a question for you regarding this topic.

 

I currently have two campaigns targeting both Search and Display. I have been advised to separate both targets and create a new campaign for one of the two targets.

 

As both campaigns are converting at a desired CPA value (My bidding is currently Target CPA) I would like to make sure if I am doing the right thing to split them up. If there is a way for me to safely separate both targets would 'Experiment' be my best bet when launching a new Campaign? (I prefer to move both my Display Targeting to a new Campaign)

 

Thank you,


 

Hi, I will suggest you to first stop CPA and start manual bid before separating the campaing in search & display. Also, analyse which has given you best performance ( search & display) and then add other campaing for poor networks ( either search or display). I am not sure about the experiment. Let see what experts says here...

Re: How to safely reduce CPA bids?

Follower ✭ ☆ ☆
# 10
Follower ✭ ☆ ☆

Hi Anil_Singh,

 

thank you for your reply,

 

 

if I change my CPA bidding strategy into Max CPC, I would expect my campaign results to change drastically as well. Especially as I am using many keywords.

 

I will await and see if any of the 'experts' would agree with that. :-)