Google’s Conversion Optimizer – CPA Bidding

Google’s new Conversion Optimizer tool has recently been launched within the AdWords interface. This new tool from Google now allows you to be able to bid in keyword auctions by setting a Maximum Cost per Action rather than maximum Cost-per-Click and can be set at Ad Group level (no keyword bidding in this auction). It can be used in campaigns using search only, content only or a combination of the two.

In order to use this feature you must hit a couple of pre-requisites:

  • Be currently using AdWords Conversion tracking (or implement it for at least 30 days)
  • Have had 200+ conversions within the campaign in the last 30 days
  • Have a reasonably stable conversion rate – better check with Google on this one…

The tool will aim to produce results for you based on the history of your campaign results, the more data that you have the better the algorithm should be! Google would not recommend using CPA for a campaign which only infrequently gets 200+ conversions within 30 days and suggest that you stop using Conversion Optimizer if your campaign drops below 200 conversions.

The essence of the tool is a complex mathematical algorithm that predicts the likely conversion factor of each keyword in your campaign in each and every keyword auction that triggers your advert. Google, in their usual shy way, give us only a tiny glimpse into the factors governing the algorithm:

  • Search Query – The history of your keywords and their likely conversion rates.
  • User Location – Again Google were pretty cagey about this one but say that if the search were more likely to convert in the UK rather than US then the Cost-per-Click bid for that keyword in an auction in the UK would be higher. They wouldn’t go on to say whether this will work on a regional or city level though!
  • Content Site – For content bids, if the keyword is more likely to convert on one particular site then the keyword will be given a higher Cost-per-Click bid in that auction.
  • And from Google’s own mouth – “Other Factors”!!

There are, of course, some great advantages of this tool – the main one is that it’s free! Google also say that it will save you time on bid management (don’t worry Attacat clients we’re already doing all of this for you!) – which could be very beneficial for the busy entrepreneur wearing many hats that doesn’t have the time to be sifting through Google AdWords and adjusting bids all day!

Google has many case studies that show that this tool will work for some people by reducing Cost per Action & increasing conversions overall, but I’m sure there will be a few stories out there where it hasn’t worked. Moral of the story – leave the bid management in Attacat’s hands!!

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