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Bidder Beware: What You Need to Know When Updating Google AdWords Bid Types

John Lee
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As we all know, the Google AdWords platform is an ever-changing machine that keeps all of us advertisers on our toes.

One area where there has been significant change in the last few years is with Google's myriad of bidding options. There's Max CPC, Enhanced CPC, and Conversion Optimizer.

Each bidding option carries a distinct set of pros and cons, but what is more important is that they all have unique effects on your account performance. When this is most obvious is when you switch from one bidding option to another. Here's an overview of what you can expect when updating your AdWords bidding options.

Max CPC to Automatic Bidding for Budget

All AdWords campaigns are set to Max CPC bidding by default. From there you can begin to add on increasingly more complex features.

The first such option is one designed to get you as many clicks as possible within your budget. This is loosely referred to as "automatic bidding for budget."

Other things you need to know:

  • This bidding option is strictly designed to increase click traffic. It doesn't take conversions into consideration.

  • You set a CPC bid limit at the campaign level. This bypasses your ad group or keyword level max CPC in order to generate more clicks.

  • Because this feature is dependent on your budget, make sure you double check your campaign budget before you switch to this bidding option. If your budget is set too high, you run a high chance of spending too much money.

Max CPC to Enhanced CPC

Enhanced CPC is the newest kid on the block, but is definitely an interesting feature I've been testing a little more heavily in recent weeks. Enhanced CPC uses your conversion data to modify your bids to increase the likelihood of conversion.

Other things you need to know:

  • You'll still manage your max CPC bid at the ad group or keyword level as before.

  • Enhanced CPC is dependent on conversion data. You will need to have AdWords conversion tracking installed before you can use this option.

  • Enhanced CPC is designed to increase conversions, so Google will increase or decrease your bid by up to 30 percent when a conversion is deemed to be more likely to occur.

  • While Enhanced CPC isn't a major shift from normal max CPC, the fact that bids fluctuate means that you need to pay close attention to your reports to ensure that you are hitting all of your performance metrics (CPA, etc.).

Max CPC to Conversion Optimizer

Conversion Optimizer is the Cadillac of Google's bidding options. It allows you to set a maximum or target CPA and let Google do the dirty work of adjusting your bids to reach those goals.

Other things you need to know:

  • You'll no longer be able to manage keyword-level bids. Conversion Optimizer functions with an ad group level CPA bid. If your ad group structure is a mess (e.g., you have too many keywords in each ad group), Conversion Optimizer might not work well for you.

  • For most advertisers, CPC becomes a less important metric when using Conversion Optimizer. Be aware that your PPC management techniques may need an adjustment.

  • Before you can use Conversion Optimizer, you have to verify that conversion tracking is installed and that you have reached the minimum conversion threshold (15 conversions).

  • For Conversion Optimizer to perform at its best, getting more data than just the requisite 15 conversions is a good idea. The more conversion data Google has, the smarter it can adjust your bids to achieve your desired CPA.

Conversion Optimizer to Max CPC or Enhanced CPC

This is probably the most important bidding switch to watch out for. Because Conversion Optimizer operates in such a different fashion than Max or Enhanced CPC, there is a smaller margin for error when making the switch.

Other things you need to know:

  • When you turn Conversion Optimizer off and revert to a manual bidding option, your ad group and keywords will revert to their pre-Optimizer levels.

  • Chances are your ad groups and keywords will be performing with a much different average CPC than their pre-Optimizer levels. A good rule of thumb is to update your bids to match their current average CPC. This will help to level out performance through the switch.

  • Make sure you update bids at the ad group and keyword level. Conversion Optimizer is an ad group level bid. But it is highly likely that you had ad group and keyword level bids before. This small detail caught me by surprise just this week!

Each of Google's bidding options come with their own sets of challenges and rewards. Each of them merits a test in your campaigns.

It is just important to remember how each of these bidding options changes your account and what you need to look out for when switching between them. Happy bidding!


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