by John Lee
Search Marketing Manager, Clix Marketing
Google announced Enhanced CPC, a new bidding feature for AdWords, earlier this year. This conversion-oriented feature is just the latest in a string of bidding tools introduced by Google. What better time than now to cover each of the available bidding features available in AdWords so that you can make an informed decision on which is right for your campaigns.
Focus on Clicks: Manual Bidding
Manual bidding is the format all of us advertisers know and love. You set ad group and/or keyword-level maximum cost-per-click (CPC) bids and adjust them up or down depending on your performance.
There is absolutely zero automation here — the bids only change when you say they do, providing the ultimate level of control of your campaigns. Advertisers who are willing and able to put in the reporting necessary to make manual bid adjustments can and will get the most out of manual CPC bidding in AdWords.
Focus on Clicks: Automatic Bidding
The automatic bidding feature was Google’s first attempt to make bidding easier for advertisers. Some might argue that this was to the detriment of PPC as a whole, but alas some advertisers needed this feature.
Automatic bidding is based off of two advertiser inputs: daily campaign budget and CPC bid limit. In essence, using this feature will get you the optimum amount of clicks based off of your daily budget.
Before this week, if your goal for PPC was to blindly increase click volume, then AdWords automatic bidding was the way to go. Prior to the Enhanced CPC feature, automatic bidding was strictly oblivious to conversion performance!
Focus on Clicks: Enhanced CPC
The new Enhanced CPC feature is an interesting beast, for sure. It can be used with either manual or automatic bidding options in AdWords to improve conversion performance. The major caveat to using Enhanced CPC is that you must have AdWords conversion tracking installed as the AdWords system will use historical conversion data to increase or lower your CPC bid by up to 30 percent.
With Enhanced CPC, you still set your bids as usual at the ad group and/or keyword level. Unfortunately, no direct reporting is available to see which keywords Google adjusted bids for.
Focus on Conversions: Conversion Optimizer
The Conversion Optimizer feature is where Google is really stepping up their game for bidding features. As much of the PPC world is growing up and trying out third party tools that include true automated bid management, Conversion Optimizer lends some much needed sophistication to the native AdWords toolset.
With Conversion Optimizer, the entire CPC bid paradigm is shifted to instead focus on your cost-per-conversion or cost-per-acquisition (CPA) and actually bid to that goal. Conversion Optimizer also depends on you installing AdWords conversion tracking. You can set maximum CPA bids (the most you’re willing to pay for a conversion) or you can set target CPA bids (the average amount you’re willing to pay for each conversion).
CPA bidding is an automated process, in so much as you set a CPA bid and Google adjusts the actual keyword CPC in order to reach your CPA target. Conversion Optimizer works great, but it takes away a lot of control you have over individual keywords.
To truly succeed with Conversion Optimizer, you have to be willing to relinquish that control and loosen up on your beliefs regarding average position and clicks. These stats are still important, but the automated nature of the system means these stats aren’t as important!
Overall, the trend is that Google wants advertisers to be more conversion focused. It’s a game of give and take, too. All of us advertisers must decide to relinquish a bit of control over our keywords in exchange for Google’s promise of improved conversion performance.
By and large, this exchange has been profitable. If you haven’t already, you should experiment with these bid types to see what works best for your PPC campaign.
Remember, even if the word “automated” is used, it should never mean you can ignore your campaigns or will never have to make any changes. Human interaction is and will remain to be the key to PPC success (or else I’m out of a job!).
This article was originally posted August 20, 2010 on searchenginewatch.com.