Breaking Down AdWords Enhanced CPC Bidding

In AdWords there are 7 automated bidding strategies to choose from, so you’ve got plenty of options. However, let’s talk about eCPC because A) it’s the default bidding strategy for newly created campaigns and B) Google recently removed the bid cap giving eCPC the potential to increase bids with no theoretical limit.

What Is Enhanced CPC (eCPC)?

Enhanced CPC is an automated bidding strategy provided for Google AdWords campaigns. It enables AdWords to increase or decrease the max CPC bid based on how likely that click would be to convert. Thus, if a particular search is deemed likely to convert, AdWords will increase the max CPC to better compete (with no theoretical limit to how high that bid could be). Or, if a particular search is deemed unlikely to convert AdWords will decrease the max CPC bid.

This strategy allows advertisers to retain a good amount of control overbidding. Manual bids (ad group or keyword-level) are still in place. All bid adjustments are still in place. The increase/decrease in max CPC bid is done AFTER looking at the manually set bid and bid adjustments are factored in.

No Bid Limit? Really?

In the past eCPC had a maximum bid increase of 30% (after applying bid modifiers). However, that limit was lifted in 2017 so that AdWords can theoretically go as high as it wants.

Keep in mind that while this seems like a potential for abuse, Google states the following:

ECPC will try to keep your average CPC below the max CPC you set (including bid adjustments), but may exceed your max CPC for short periods of time.

While not totally reassuring, I would anticipate that AdWords would offer some type of credit/refund if eCPC just went crazy for more than a couple weeks.

Reading Between The Lines

While this seems pretty straightforward and many advertisers would just take this at face value, let’s look harder. The entire premise of the bidding strategy is Google’s ability to determine the likelihood of a conversion. Google has a ton of data on users: search history, device, location, age, gender, sites you visit, YouTube videos you watch, etc. So they have a lot of signals to factor in, but remember that you define a conversion. If one advertiser is measuring conversions as sales and the other is measuring conversions as email signups, then eCPC will bid very differently for each of these advertisers.

Also, for every click that eCPC gets you above your max CPC bid, it will need to find a low cost click to help keep the average CPC below the max CPC (like the quote above says). This could potentially be bringing in low-quality clicks that you’re then remarketing to. Set up negative audiences to keep these low-quality people out of your remarketing. Review your search terms reports, filter for low CPC (that will be the indicator) and see what negative keywords you can use to “educate” AdWords on clicks you don’t want.

Summary

If you don’t have a lot of time to handle your CPC bids manually (and the various bid modifiers) then eCPC would be worth a test. Just make sure you’ve defined your conversions correctly and you’re still keeping an eye on things.

Do you recommend eCPC bidding? Why or why not? We’d love to hear your thoughts about this bidding strategy in the comments below.

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