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Organizing Ad Groups by Match Type w/CPA Bidding

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# 1
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Hello all - I've been lurking a few weeks and it's been extremely helpful, but currently I'm having an issue that I haven't found a straight forward answer to Smiley Sad

 

My understanding is that if I create an adgroup with all phrase match keywords set at a max CPC of $X, and an adgroup of the same/similar keywords with all broad/mod.broad match at a max CPC of $Y, as long as the phrase keywords are set as negative for the broad group and $X > $Y then the correct ads should be triggered. Which would allow for more targeted ads for the phrase match group where search intent is more clear. More targeted ads = higher CTR and conversion rates...

Am I on the right track so far?

 

Now if instead of manual bidding I use CPA, does the same logic apply? Can I set the CPA for the phrase match group to say $40 CPA, and the broad group to $30 CPA and expect the targeted ads to be shown to the phrase matched queries and the more general ads to be displayed to the broad matched queries?

 

I'm "using up" my budget on keywords that get a lot of impressions and clicks, but low conversions and much higher cost per conversion than I'm willing to pay. My end goal is to limit how much of the budget gets used by keywords with low conversions/high clicks so I can allocate some budget to high converting/low traffic keywords. I'm just having trouble reaching the appropriate balance....any help is greatly appreciated

 

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Accepted by topic author S-Klep
September 2015

Re: Organizing Ad Groups by Match Type w/CPA Bidding

[ Edited ]
Badged Google Partner
# 4
Badged Google Partner

In my mind, CPA bidding is the closest thing to a magic wand there is with adwords. I have found CPA bidding to be even more magical than an increase in quality score, and potentially another tool to help try and improve quality score to boot.

 

You have to give it some time though. The more data the google machine has, the more effective the CPA tool can be. Perhpas even earning you a higher position, which may lead to better CTR, which may lead to improved QS, all while increasing conversions, conversion rate, and reducing the cost per conversion. It's one area where the google machine really seems to get it right.

 

Of course, it seems like the problem you are having is that - Regardless of the bidding options - The majority of the budget seems to be going to KW terms that don't convert. Find those search query terms that are actually converting, put the majority of your budget to those exact terms (try putting them in their own campaign), and once you have enough conversions to enable CPA bidding try it, and give it enough time to really do it's thing. Each of those exact terms is going to have a unique CPA, but you can get a much better handle on each term if you do not also have thousands(?) of possible SQ variations generated from broad or phrase match terms.

 

Once you have the exact terms in their own campaign, add those terms as exact negatives to the broad/phrase campaign to make sure the most profitable campaign gets all the potentially profitable impressions for those terms. Then you can reduce your adbuy to the broad/phrase campaign, or even pause those unprofitable terms all together. If you have already found the only profitable underlying search query terms, the CPA of the broad/phrase campaign is going to continue to increase, and conversion rates will decline. However, if you mitigate the losses in that campaign, and optimize the performance of the exact campaign, your overall conversion rates and CPA's will improve for the account. 

 

There's no shortcut to account optimization, and however you go about it, it just takes time. Smiley Happy 

 

 

Tom

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Re: Organizing Ad Groups by Match Type w/CPA Bidding

Badged Google Partner
# 2
Badged Google Partner

Yes, is the answer to the question of "will it work the same with CPA bidding".

 

I also think your approach is valid, and I have found a similar approach to be quite effective. There is always one exact match search query term that generates the majority (or should I say the most of any specific KW term) of your conversions. It takes time to find that term, but once I do, I like to put that exact match KW in it's own campaign. That way I can direct all the budget necessary, or available if there's a limited budget, to the single query term that generates the greatest return.

 

The key is the search terms report. You have to know what specific query users are actually searching for. With your broad/phrase campaign you already have some/enough data to know what the one query term is that gives you the most bang for your buck. Isolate that term, direct your budget there, and if you still have budget available repeat the process for the next X number of query terms that provide the majority of your conversions.

 

CPA bidding is a little different of a critter than CPC bidding. Because the bid cannot be edited at the KW level, if you are using the isolate and optimize strategy, CPA bidding may be most effective with single KW (exact) adgroups. If you have one KW in the adgroup that "goes rouge", with a much higher or lower CPA than the rest of the terms, it can skew the overall performance of the adgroup. There are many potential benefits to CPA bidding, but it's important to remeber that the google machine needs time for it to be the most effective. Try to stick with it for some time (say 30-90 days?). Isolate the best performing query terms, allocate enough budget to acheive 100% impression share (or all the budget you can), get enough conversions to use CPA bidding, and see what happens. Smiley Happy 

Tom

Re: Organizing Ad Groups by Match Type w/CPA Bidding

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# 3
Follower ✭ ☆ ☆

Awesome response! ...and +1 for using the word "critter" Smiley Wink

 

I think I may have made a mistake going with CPA bidding. I was using manual CPC, but a few keywords were generating a large portion of my clicks, with conversion rates around 1-3%.  So my thought process was "OK, well I'll get these high CPA keywords under control by switching to max CPA bidding."

 

Maybe I need to re-evaluate my approach. Should I stick with CPC bidding, but just bid lower for high click/low conversion keywords? Or seperate keywords into groups dependent on volume?

Marked as Best Answer.
Solution
Accepted by topic author S-Klep
September 2015

Re: Organizing Ad Groups by Match Type w/CPA Bidding

[ Edited ]
Badged Google Partner
# 4
Badged Google Partner

In my mind, CPA bidding is the closest thing to a magic wand there is with adwords. I have found CPA bidding to be even more magical than an increase in quality score, and potentially another tool to help try and improve quality score to boot.

 

You have to give it some time though. The more data the google machine has, the more effective the CPA tool can be. Perhpas even earning you a higher position, which may lead to better CTR, which may lead to improved QS, all while increasing conversions, conversion rate, and reducing the cost per conversion. It's one area where the google machine really seems to get it right.

 

Of course, it seems like the problem you are having is that - Regardless of the bidding options - The majority of the budget seems to be going to KW terms that don't convert. Find those search query terms that are actually converting, put the majority of your budget to those exact terms (try putting them in their own campaign), and once you have enough conversions to enable CPA bidding try it, and give it enough time to really do it's thing. Each of those exact terms is going to have a unique CPA, but you can get a much better handle on each term if you do not also have thousands(?) of possible SQ variations generated from broad or phrase match terms.

 

Once you have the exact terms in their own campaign, add those terms as exact negatives to the broad/phrase campaign to make sure the most profitable campaign gets all the potentially profitable impressions for those terms. Then you can reduce your adbuy to the broad/phrase campaign, or even pause those unprofitable terms all together. If you have already found the only profitable underlying search query terms, the CPA of the broad/phrase campaign is going to continue to increase, and conversion rates will decline. However, if you mitigate the losses in that campaign, and optimize the performance of the exact campaign, your overall conversion rates and CPA's will improve for the account. 

 

There's no shortcut to account optimization, and however you go about it, it just takes time. Smiley Happy 

 

 

Tom