I'm struggling a bit with the the logic/methodology of adding positive bid adjustments to an RLSA audience and how it can help with cost per conversion. Below is a scenario to help explain my question.
Let's say I have a campaign where we average a $20 cost per conversion, which is near our goal. I want to increase conversions, while still achieving this cost per conversion. One possible tactic to try is an RLSA audience.
Therefore, I add an RLSA audience to the campaign, but don't apply any bid adjustments. I first want to get a sense of how this audience performs in this campaign. After 30 days, I notice that this RLSA audience (again without any bid adjustment) has a cost per conversion of $10. Therefore, the conclusion is that past site visitors are more likely to convert (better conversion rate) and are a contributor to me hitting my $20 cost per conversion goal.
Now, when I read most articles talking about RLSA bid adjustments, the recommendation in this scenario would be to apply a positive bid adjustment (say 25%) to make sure we maximize the conversion potential of this audience.
However, this is where my question is. I understand that, in theory, this will produce more conversions. However, the cost per conversion on this audience will likely go up, given my CPC has increased, right? Assuming no other bid changes are made, won't my overall campaign cost per conversion go up, putting me over my target?
I feel like I am not fully grasping the concept or my logic is flawed. Any help/clarification is appreciated.
Your logic is not flawed at all. In fact, it seems like you have your account so well optimized you don't need to use this tactic to achieve your goals.
If you are using target and bid so you are only reaching your remarketing audience when they are actively searching for your products/services, then the adgroup bid is the only bid you need. You are only targeting that specific audience, so you don't need a bid adjustment for that audience.
If you are using bid only, then your ads will show to anyone searching for the targeted KW terms, and you can bid more when someone in your audience is actively searching for those terms. If the remarketing audience is too small to target on it's own at any volume, then perhaps you use bid only so you don't limit your reach. That way you can bid low enough at the adgroup level to keep an acceptable CPA for the broadest audience, but bid more to be in the higher converting positions for your remarketing audience.