How Adwords Enhanced CPC Works

Each time your ad shows up, Adwords Enhanced CPC automatically increases and/or reduces your maximum CPC bid to acquire more conversions at or below your current CPA.

• To use Adwords Enhanced CPC, Adwords conversion tracking is required. Adwords analyzes your campaign’s historical conversion tracking data and determines your new maximum CPC bids.
• A click may cost more than your pre-set maximum CPC bid, as Adwords Enhanced CPC can raise your Max CPC bids by up to 30%.
• Adwords Enhanced CPC works on search targeting campaigns (Google’s domains and Google’s search network) and Adwords content targeting campaigns (Google’s content network).

Adwords Help provides official explanation on Enhanced CPC.

How Adwords Enhanced CPC Works with Other Adwords Tools

When Google Adwords Enhanced CPC is enabled, other Adwords tools will be incompatible for use:

• Adwords Editor: Changes to your campaigns cannot be posted through AdWords Editor
• Adwords Conversion Optimizer with Max CPA bidding
• Adwords Conversion Optimizer Target CPA bidding

When Google Adwords Enhanced CPC is enabled, other Adwords tools can be used concurrently:

• Adwords Content Network Demographic Bidding: The demographic bid multipliers you set will be applied in each auction
• Advanced Ad Scheduling
• Adwords Automatic Bidding: The CPC bid limit you set will be treated as a limit on the Enhanced CPC bid

Google offers the automatic bid optimization tool, Adwords Conversion Optimizer, to advertisers to manage and improve Adwords campaign ROI. 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 USD20 through Max CPA Bidding, you may have to make a difficult initial guess and set your CPA to maybe USD30.

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 USD20 through Target CPA Bidding, set your CPA directly to USD20.

Adwords Conversion Optimizer uses the following factors to update your keywords’ cost-per-click bids for each auction:

• The country a user is browsing from
• The search partner site or content network site your ad appears on
• The broad match keyword a searched query has matched on

To use Conversion Optimizer, Adwords conversion tracking must be enabled and your campaign must have received at least 15 conversions in the past 30 days.

Why Adwords Editor?

The major benefits for using Adwords Editor over Google Adwords account interface include:

• Making changes through Adwords Editor is done offline, you can then upload the changes to your Google Adwords account at any time
• Large scale changes can be made quicker through Adwords Editor than through Google Adwords account interface
• Store and navigate multiple Google Adwords accounts, and perform advanced searches and edits
• Copy or move items between your ad groups, campaigns, and Adwords accounts
• Export a copy of your Adwords account for archiving or sharing, and/or import an archive or share file of your Adwords account

Many Google Adwords features have been made available through Adwords Editor.

Using Adwords Editor

Adwords Editor is available in almost 40 languages. Google currently offers official help sections for using Adwords Editor. Other Adwords Editor features include:

• Keyword Opportunities Tool
• Keyword Grouper
• Quality Score in Adwords Editor

Keyword opportunities tool allows you to discover new keywords and include:

• Keyword expansion: Generate keyword ideas based on descriptive words or phrases. For example, enter the term “gourmet coffee” to see other related terms, along with the estimated search volume and competition for each keyword.
• Search-based keywords: Find new keywords that are relevant to your website. Based on your website URL, this feature generates a list of relevant user queries that have occurred on Google search properties with some frequency over the past year. The keyword suggestions won’t overlap with any of the keywords currently in your campaigns.
• Keyword multiplier: Combine lists of terms to form a new keyword list. For example, your first list could contain adjectives, such as “cheap” and “discount.” Your second list could contain products or services, such as “hotels” and “motels.” The tool will then show you every possible combination of those terms, so you can select the appropriate ones for your account.

Keyword grouper enables you to break up your keyword list into groups of related terms.

Google Adwords Quality Scores for each of your keywords is displayed in Adwords Editor. Adwords Quality Score is represented in numerical scale from 1 to 10:

• Great (8, 9, 10): Your keyword is very relevant and your Quality Score needs no improvement.
• OK (5, 6, 7): Your keyword is relevant, but you can still benefit from a higher Quality Score.
• Poor (1, 2, 3, 4): This keyword isn’t very relevant to users, and your Quality Score needs improvement.

Get Adwords Editor

Download and install the latest version of Adwords Editor.

Adwords Editor’s Release Notes

Google has always been making improvements to Adwords Editor. Keep your Adwords Editor version up-to-date by regularly reviewing Google’s official release notes, so that you always have the latest features available.

How Adwords Conversion Tracking Works

AdWords Conversion Tracking places a cookie on a user’s computer when she clicks on one of your AdWords ads. When this user reaches your conversion page, Google records a successful conversion which will be reflected to the corresponding campaign, ad group, URL and keyword. The cookie on the user’s computer will expire in 30 days.

With Adwords Conversion Tracking, you have the option to track either a purchase (or sale), a lead, a sign-up or a view to a web page.

Set Up Adwords Conversion Tracking

Define an action on the Adwords Conversion Tracking page. You can create up to 30 actions of different categories.

Purchases/Sales

• Helps online commerce sites track purchases and sales to determine return on investment (ROI).
• Page that says “Thank you for your purchase.”

Leads

• Appropriate for sales organizations interested in tracking how many users requested follow-up calls for more information from a member of the sales team.
• Page that says “Thank you for contacting us.”

Sign-ups

• Designed for sites interested in tracking sign-up statistics for subscriptions or newsletters.
• Page that says “Your subscription has been processed.”

Views of a Key Page

• Helps sites track how many times users have landed on a single page that’s important to your business.
• Any important page of your website that you want users to view.

Other

• Tracks a category unique to your service or business.

• Name your action (e.g. Purchase)
• Assign a revenue value to your action: You can assign either a fixed value (e.g. USD 20.00, if the value is always a constant) or a dynamic variable (e.g. Total_Cost, if the value is not a constant as with shopping cart)
• Select conversion page language (e.g. English US)
• Select conversion page security level (https:// for secure page, http:// for other pages)
• Choose a text format and background color for your Google Site Stats (for optimal user experience, choose not to show the Google Site Stats text)

You are now given the tracking code snippet.

Identify the conversion page on your website. It depends on the type of conversion you will need to track, but it is usually the purchased confirmation page or the “thank you” page.

Place the code snippet on your conversion page. The code snippets will have to be placed between the body and /body tags. For optimal user experience, place the code snippet immediately above the /body tag.

Verify the Adwords Conversion Tracking has implemented correctly by either:

• Waiting for a conversion to occur
• Completing a test conversion on your website (which will cost you at least an ad click)

For more setup information, download (*.pdf) the Adwords Conversion Tracking Setup Guide.

Review Conversion Reports and Apply Optimization Actions

Review the Adwords Conversion Tracking metrics and apply Adwords optimization tips to your account.

Use Adwords Conversion Optimizer to automate your keyword bidding and optimize your ROI. One of the requirements for using Adwords Conversion Optimizer is that you will have to be concurrently using Adwords Conversion Tracking.

Your Adwords broad match keyword strategies can be optimal by using:

• Adwords Conversion Tracking: Most of your reports will show conversion statistics columns
• Adwords Search Query Performance Report: The conversion statistics columns are displayed within this report so that you can identify your negative keywords and new exact match keywords

Stop Adwords Conversion Tracking

If you no longer need Adwords Conversion Tracking, you can simply disable it from the Adwords Conversion Tracking page in your account. If you want to completely remove the conversion statistics columns from your campaign summary tables, you will have to remove the conversion tracking code snippet from all your pages and delete your actions through the Adwords Conversion Tracking page.

Import Google Analytics Goals

Import Google Analytics goal data into your Adwords account:

• To correlate your Google Analytics data (e.g. goals, transactions and pageviews) with your Adwords ad clicks
• To enhance the automation and optimization abilities of Adwords Conversion Optimizer

What Adwords Bid Simulator does?

You set your keyword’s maximum CPC through Adwords Bid Simulator, and it will show the estimation of cost, clicks and impressions in which your keyword will generate.

Adwords Bid Simulator is available to campaigns targeting Google.com and Google’s Search Network, and refreshes cost, click and impression data once per day.

How does Adwords Bid Simulator work?

Google uses the information through your Adwords account to predict cost, click and impression data of your keywords:

• Your keywords’ bids and Quality Score
• The keyword bids and keyword Quality Score of your competitors
• Historical search volume of Google.com and Google’s Search Network of your keywords
• Historical click volume of your keywords

Compatibility to other Adwords features

You cannot use Adwords Bid Simulator while you have enabled any one of the features below:

• Adwords Conversion Optimizer
• Budget Optimizer
• Position Preference
• Ad Scheduling

Concerns when using Bid Simulator

I believe Adwords Bid Simulator can do better predictions for both exact match keywords and phrase match keywords than for broad match keywords. The traffic and performance of Adwords broad match keywords can be much more volatile due to the nature of broad match type.

Adwords Bid Simulator, however, will not be able to predict conversions, even your account has Adwords conversion tracking enabled.

Interestingly though, Yahoo Search Marketing’s Panama platform always has the keyword bid estimator since its official launch, which is a similar feature to Adwords Bid Simulator.

Google’s Inside Adwords blog announced that Adwords Bid Simulator is now available in the new Adwords interface.

Besides enabling the Conversion Optimizer, you should ensure:

• Your campaign has been using AdWords conversion tracking for at least two weeks.
• Your campaign is direct-response oriented and your campaign’s conversion type is defined, for example as a completed purchase or signup.
• Your campaign has been receiving conversions at a similar rate for the last several days.
• Your campaign has no major changes within the last two weeks such as moving your conversion tracking code or redefining your conversion event.

Once you have activated the Conversion Optimizer, you still pay for CPC, not for CPA.

Once the Conversion Optimizer calculates a predicted conversion rate for a particular ad impression, it multiplies the predicted conversion rate by the maximum CPA bid to come up with an equivalent maximum CPC bid. If this equivalent CPC bid is greater than the keyword’s minimum search bid, the equivalent CPC bid is used in the auction as a maximum CPC normally would be.

The Conversion Optimizer manages your ad placement in each auction so that you receive as many profitable clicks as possible and receive as few as unprofitable clicks as possible.

For example, the keyword “flowers” may have a 2% conversion rate while the keyword “roses delivery” may have a 7% conversion rate. That doesn’t mean that you don’t want any clicks on “flowers,” but you probably wouldn’t want to spend as much on that keyword as you might be willing to spend for clicks on “roses delivery.” The Conversion Optimizer uses information like this to adjust your bids based on how valuable each click is for you.

When adjusting the cost-per-click bid, Adwords Conversion Optimizer also takes into account factors including:

• The country a user is browsing from
• The search partner site or content network site your ad appears on
• The broad match keyword a searched query has matched on

You will not be able to use the following Adwords features with the campaigns that have Conversion Optimizer enabled:

• Separate Content Bids
• Position Preference
• Advanced ad Scheduling

For your campaigns to be eligible for using the Conversion Optimizer include:

• Your entire campaign can have no more than 64 ad groups and no more than 2,000 keywords
• Your campaign must target no more than one language in which the language must be one of these: English, Spanish, French, German, Portuguese, Italian, Danish, Dutch, Finnish, Norwegian, Swedish, or Simplified Chinese.

To help you and your clients get the most return from using the AdWords program, we offer Automatic Daily Budget Suggestions via an alert within the My Client Center.

If client accounts consistently reach their set campaign daily budgets, the alert will link to the budget analysis page for this client account, detailing each campaign and its unique budget analysis. This analysis includes a percentage and click increase projection based on the campaign’s budget and performance history. Meeting this budget recommendation can increase the client’s ad exposure and the likelihood of more ad clicks.

Automatic Daily Budget Suggestions are offered only as recommendations; advertisers are not required to follow them. As always, you can reject the suggestion at any time.

You have the option to accept or reject the recommendations. Below is an example of reason provided by this feature for changing the campaign daily budget:

Daily budget of [$**] met on 15 of the last 15 days. Increasing your budget to the recommended amount would allow your ads to show [***%] more often and get approximately [****] more clicks per month.

However, the feature does not take your campaign ROI into account. So you should review the ROI before applying any actions.

The Conversion Optimizer (CPA bidding feature) is now out of beta and available to campaigns with at least 200 conversions in the last 30 days. The Conversion Optimizer manages your CPC bids, with the goal of keeping the cost of each conversion below the maximum cost-per-acquisition (CPA) you specify.

The Conversion Optimizer currently only works on campaigns that have at least 30 days of conversion data with at least 200 conversions. I believe the more conversion data (aka history) you have with your campaigns, the most accurate this feature can work.

The Conversion Optimizer manages your CPC bids for you, making adjustments based on the likelihood of a conversion in each ad auction.

Determining the Maximum CPC

Below is how the Max CPC is determined by the feature:

The Conversion Optimizer predicts a conversion rate for your ads every time they’re eligible to appear. This prediction is based on various factors. For example, here are some of the factors that affect the conversion rate on Kim’s custom shirt website:

• The search query – Kim’s conversion rate is higher when users search for custom shirts than when they search for shirts.
• The location of the user – Her conversion rate is highest when her ad shows in the United States.
• The conversion history of particular sites – When her ad shows on certain types of content sites in the Google Network, Kim is more likely to get conversions.

Determining the Maximum CPA

To activate the Conversion Optimizer, you will be recommended Maximum CPA values for each of the adgroups within your campaign. You are to either accept the recommended CPA values or set new CPA values. Adwords works out your adgroup CPA according to the method below, assuming your adgroup consists of 2 keywords:

Keyword #1

• Max CPC: $1.00
• Conversion Rate: 10%
• Number of Conversions: 100

Keyword #2

• Max CPC: $1.40
• Conversion Rate: 20%
• Number of Conversions: 50

To determine the Maximum CPA for a keyword, the Conversion Optimizer divides the Max CPC by the Conversion Rate:

• Max CPA = Max CPC / Conversion Rate
• Max CPA of Keyword #1: $10.00
• Max CPA of Keyword #2: $7.00

The Conversion Optimizer works out the recommended Maximum CPA for the campaign by using the Maximum CPA of each keyword. In the above example, Keyword #1 has twice as many conversions as Keyword #2, so the weighted average is $9.00. This is the recommended Maximum CPA for the campaign.

If you set your maximum CPA bid to the recommended amount, you should see more conversions without much change to your costs. If you set your bid below the recommended amount, you’re likely to pay less for each acquisition, but you may also get less traffic on your ad and fewer conversions.

Inside Adwords blog also recently published an article that summaries the Conversion Optimizer.

Honestly, with a visual map in front of you it requires less efforts in selecting the locations / regions to do geo-targeting.

Adwords has always been a more scalable PPC platform than Panama mainly because it enables advertisers to randomly select multiple countries and/or regions to geo-target. Panama, on the other hand, still requires advertisers to create one account per country before they are able to run campaigns across multiple countries.

• Copy or Move Keywords and Ad Text tool
• Advanced Search and Editing tool

Aside from having 23 languages available, Adwords Editor 4.0 includes functions that allow users to manage their keywords and ads much as they do with the Modifying Your Campaigns tools, according to Inside Adwords Blog.

Instead of setting a maximum cost-per-click (CPC) or cost-per-impression (CPM) bid, you can set a preferred CPC or CPM bid that represents the average price you want to pay.

For example, suppose you want to pay an average CPC of $0.50. Currently, you need to regularly monitor and adjust your maximum CPC bids to keep your costs at or around $0.50 per click. Using preferred cost bidding, you can simply tell us that you want your average CPC to be $0.50, and we’ll manage your bids to reach that goal.

Here are the possible compatibility issues of preferred cost bidding to other existing Adwords functions:

• It is not possible to have both preferred and maximum bids in the same campaign.
• Preferred cost bidding is available on the campaign level, so all ad groups and keywords under that ad group will inherit the bidding option.
• The position preference feature will not work if you use preferred cost bidding.
• The Find/Edit Max CPCs tool will not work for campaigns that are set to use preferred CPC bidding.

For Search Network advertisers, the actual cost of any one click will not be more than twice your preferred CPC bid. For Content Network advertisers, the actual cost of any one click will be more than four times your preferred CPC content bid. Also, it is recommended that you enable separate content bids for your campaigns.

This is why sometime ago Google Introduced Adwords Editor. This allows Adwords advertisers who often require to make changes to their campaigns make the necessary changes offline. Afterwards, they can simply upload the changes.

Download Adwords Editor here.