In early 2008, Google AdWords replaced their PPA (pay per acquisition) program with Conversion Optimizer – a feature intended to maximize conversions at a target cost set by the advertiser. Conversion Optimizer allows advertisers to set a maximum CPA for their ads. Google then uses an algorithm to serve ads when they are most likely to convert, based on account history.
Conversion Optimizer isn't for everyone. If you're looking for branding, and/or have a large PPC budget with wiggle room for testing, you probably don't need Conversion Optimizer. That said, you can have great success with the tool, especially in certain situations.
There are a few caveats to using Conversion Optimizer:
- The Optimizer requires at least 15 conversions per month, but I recommend more than that. Think about it – 15 conversions is one every other day. That doesn't give Google a lot to go on, and you may find that your impressions, clicks, and conversions shrink to zero while Optimizer figures things out. The more data you can feed to the algorithm, the better.
- Make sure your daily budget is high enough. I tried to use Conversion Optimizer for a client who had a relatively low daily budget and a relatively high target CPA. The target CPA and the daily budget cap were essentially equal. This didn't give the algorithm enough to go on, and we saw traffic shrink by about 80 percent after Optimizer was implemented – and conversions shrunk to zero.
- Watch out for seasonal spikes and dips. If your business is heavily seasonal, Optimizer may not use the right data to serve your ads. We tested Conversion Optimizer for one of our clients by turning it on after their busy season was over, hoping to maintain the high conversion rates we'd seen. While Optimizer was able to reduce overall ad spend during the slow season, conversion rates fell off at a greater than normal rate.
With that in mind, here are three instances where Conversion Optimizer can help.
When Search Volume is Significantly Higher Than the Advertiser's Budget can Support
PPC purists will say that budgets are for the birds – if you're getting a good cost per conversion from PPC, you should be willing to spend as much as you can in the channel. I agree. However, this just isn't the case for everyone, especially big brand traditional advertisers, government agencies, and others who have a set budget from which they can't deviate.
If your budget is limited, and the goal of your PPC campaign is to generate conversions, it stands to reason that you want as many conversions as you can get for the money. That's where Conversion Optimizer comes in. By showing your ads on searches that are most likely to convert, you'll get more conversions per impression. Our advertisers in this situation have seen conversion rates improve by as much as 35 percent, with no increase in budget, using Conversion Optimizer.
When You Want to Expand Your Campaign to Content or Try Automatic Match
While the quality of traffic in the Content Network has vastly improved over the past few years, it can still be the Wild West for advertisers. Automatic Match in search can be an even bigger nightmare, showing ads on barely-relevant queries. But, if given enough data, Conversion Optimizer solves those problems.
When You Want to Minimize Account & Bid Management Time
Let's face it, even the most hands-on PPC managers have a finite amount of time available to manage accounts. Even if you're using automated bid management tools, squeezing maximum ROI out of every campaign likely takes more than 24 hours a day.
That's where Conversion Optimizer comes in. Assuming you have enough data, Conversion Optimizer can help a campaign meet its target CPA without requiring a lot of hands-on bid management. While I'm not advocating "set it and forget it," Conversion Optimizer can squeeze the most out of campaigns that you want to maintain without spending a lot of time managing them.
Meet Your Favorite Search Engine Watch Contributors
Many of SEW's leading expert contributors will be at ClickZ Live, the new online and digital marketing event kicking off in New York (March 31-April 3). Hear from the likes of: Thom Craver, Josh Braaten, Lisa Barone, Simon Heseltine, Josh McCoy, Lisa Raehsler, Greg Jarboe, Dan Cristo, Joseph Kerschbaum, John Gagnon, Eric Enge and more!