By Helen Brown
When setting bids within our AdWords accounts, we have the option to choose cost-per-click (CPC) bidding, cost-per-thousand impression (CPM) bidding and also cost per acquisition bidding (CPA). Whilst we are all familiar with CPC and CPM bidding, CPA bidding can also be a very useful way to increase profits and get the best from your AdWords account. So here is a little of what is involved and how it is used.
When using CPA bidding, you bid with a maximum cost per acquisition instead of maximum cost per click. Bidding with CPA however will still involve paying per click, and using it will lessen the need to adjust your bids manually. It is easy to activate, and also deactivate should you wish to do so. Upon deactivation, your campaigns will revert back to the old bids before you used conversion optimizer. There are no additional charges for using conversion optimizer, and also you wont need to learn how to navigate a new interface etc to use it. Conversion optimizer will allow you to specify the maximum amount (max CPA) that you are prepared to bid per acquisition, whether the desired conversion is a purchase or sign up for each ad group in your campaign. Google have also advised that a lot of advertisers who have used conversion optimizer have achieved double-digit percentage increases in conversions, whilst paying either the same or less for the conversion. When you use conversion optimizer, the system analyses your historical conversion tracking data in order to make predictions about your conversion rate in the future, this will get your conversions at a lower cost.
Conversion optimizer will give what Google call ‘multi dimensional’ bid management, where bids are varied depending on a number of factors so that the value of the click can be better predicted. This type of bid management is capable of considering a number of factors such as broad match versus exact match and search partner sites for the search targeting. For display targeting, it takes factors such as whether the ad and site content are well suited, and also the sites topics too. It will also consider the users attributes such as location, the browser and operating system they are using, and their language settings. Clever!
You can use conversion optimizer when conversion tracking is enabled on your account, but conversion optimizer can only be used with existing campaigns that have received at least 15 conversions in the last 30 days, as your past conversion data is required in order for the system to be able to place bids appropriately. Also it is important that your campaigns conversions have been occurring at a similar rate for the previous few days before activation.
You can enable conversion optimizer on your selected campaigns from the settings tab of your campaign, go to bidding options and click edit and you can choose ‘focus on conversions’ (conversion optimizer). You will be asked to set your maximum cost per acquisition. After completing this action and when looking at your ad groups tab you can edit the max CPA from there should you wish to do so, as your max CPC column will now show as your max CPA column. It is good practice when using conversion optimizer to compare your CPA and conversions before and after using the conversion optimizer to track your success. An important thing to remember is that your maximum CPA bid is not what you are targeting to spend, but more the maximum that you are prepared to spend to get the conversion, your average CPA should generally speaking always be less than your bid BUT Google do clearly advise that it is possible for your actual CPA to exceed your specified maximum CPA figure as there are factors outside of Google’s control at play. However, you can change your CPA bids as often as you like.
When you start using conversion optimizer, you will see that there is a recommended ad group bid amount suggested. This will help to keep your costs steady and under control whilst changing from your previous bidding method to the new one. When you have been running with conversion optimizer for a little while, you can decide if you want to adjust your bids after analyzing your account statistics.
This bidding option sounds like a great way of taking the stress out of campaign/bid management. I’m sure that it will be beneficial to anyone looking to make it a part of their advertising and account management strategy! Good luck 
