Google offers AdWords Conversion Optimizer, the automatic bid optimization tool to advertisers to manage and improve AdWords campaign Return on Ad Spend (ROAS). AdWords Conversion Optimizer’s Max CPA Bidding allows you to set the maximum CPA that you will pay for each conversion, but the maximum CPA will almost always be different to your actual cost per conversion. For example, if your goal is to achieve an average CPA of $20 through Max CPA Bidding, you may have to make a difficult initial guess and set your CPA to maybe $30.
Target CPA Bidding enables you to specify the average amount (or actual cost) you will pay for a conversion. For example, if you are to achieve an average CPA of $20 through Target CPA Bidding, set your CPA directly to $20.Any campaign with at least 15 conversions in the last 30 days will be able to use it.
Google offers its suggestion for the Max. as well as the target CPA. However, it should be set based on the advertiser’s discretion.
I have used it over the last several months on a few campaigns and have generally found success with it. Given below is a table of the month on month stats for one of the campaigns in my account. The Conversion Optimizer was activated on 7th February and was pulled back on 7th April.
The table above shows that on activating the conversion optimizer, my conversion rates rose from 8.80% to 11.73% and consistently remained at 11% for the next two months. The CPA showed a massive drop of 62.4% from January to February.
Some Tips for Implementing the Optimizer:
- Do not set unrealistic Max. CPA targets. If you think it is an automated tool and will get you conversions at rock bottom CPAs, you may end up squandering a lot of budget
- Do not use the conversion optimizer as a getaway. Manual Optimization is your best bet if your account is not performing well. The Optimizer can be used to further enhance the conversion numbers in the well performing campaigns that have an exhaustive negative and positive keyword list and targeted ad copies that pass on the correct message to the audience. Another scenario where the Optimizer could prove useful is when the conversion numbers look great but the CPA leaves a lot to be desired
- Monitor the performance of the campaign on conversion optimizer daily. If it seems to have dropped, modify the CPA or pull off the optimizer completely
- Give the optimizer at least a week to show its mettle before completely cancelling it for an account
My honest opinion is that the Conversion Optimizer definitely deserves a chance and can show phenomenal results if used correctly. However, excessive dependence on the Optimizer could lead to disastrous results. USE IT WITH CAUTION as you would any other automated tool!
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