Using Conversion Optimizer with Conversion Tracking

Overview of Conversion Optimizer

The Conversion Optimizer is an AdWords feature that uses your AdWords Conversion Tracking data to get you more conversions at a lower cost. It optimizes your placement in each ad auction to avoid unprofitable clicks and gets you as many profitable clicks as possible.

How it works:
With the Conversion Optimizer, you bid using a maximum cost-per-acquisition (CPA), which is the most you're willing to pay for each conversion (such as a purchase or signup). Using historical information about your campaign, the Conversion Optimizer automatically finds the optimal equivalent cost-per-click (CPC) bid for your ad each time it's eligible to appear.
You still pay per click, but you no longer need to adjust your bids manually to reach your CPA goals and can benefit from improved return on investment (ROI). To calculate the optimal equivalent CPC bid, the Conversion Optimizer first calculates a predicted conversion rate for each auction, taking into account your ad's conversion history, the keyword's broad match query, the user's location, and the conversion rates of Google's search and Display Network partner sites. The feature then generates an ad rank by combining your CPA bid, quality score and predicted conversion rate.

The recommended maximum CPA bid is the ad group bid we suggest in order to keep your costs stable when you change from manual bidding to the Conversion Optimizer. The recommended bid is directly based on your current CPC bids and conversion rates over time. For example, if you have one ad group with two keywords, the Conversion Optimizer divides the current maximum CPC bid by the conversion rate to get a maximum CPA bid for each keyword. With the maximum CPA bid for each keyword, the Conversion Optimizer can compute the recommended maximum CPA bid for the campaign (the average of the keyword bids, weighted by the number of conversions for each keyword).

Improving your performance:
Many advertisers using Conversion Optimizer have achieved double-digit percentage increases in conversions, while paying the same price or less for each conversion.

Enabling Conversion Optimizer

To begin using the Conversion Optimizer, you must have adwords conversion tracking enabled, and your campaign must have received at least 15 conversions in the last 30 days. Your campaign must also have only keywords.

Here's how to enable AdWords Conversion Tracking:

1. Visit adwords help
2. Click Create a new action.
3. Follow the steps provided. You'll be guided through the process of receiving your code, placing it on your site, and completing the set-up.

Read through the complete conversion tracking setup guide for more details.

Here's how to enable Conversion Optimizer, once AdWords Conversion Tracking has been activated:

1. Sign in to your AdWords account at https://adwords.google.com.
2. Select the Campaigns tab.
3. Select the campaign name.
4. Select the Settings tab.
5. Next to 'Bidding option' click Edit.
6. Click the 'Focus on Conversions (Conversion Optimizer) radio button.
7. Click Save to finish.

Responding to Conversion Optimizer Data to Improve Conversions

If you're using conversion tracking, it's likely you're interested in two metrics:

• The number of conversions you get per day
• The average cost for each of these conversions (this is your average CPA, or cost-per-acquisition)

Here are three guidelines for assessing whether the Conversion Optimizer is working for you.

Guideline 1: Compare your campaign's conversions and average CPA before you enabled the Conversion Optimizer to its performance since then. Keep in mind that external factors, such as changes in your competitors' ads, can affect your campaign's key metrics from week to week. To help determine whether your campaign performance has been affected by changes you made or by external changes, you might consider comparing changes in the performance of your Conversion Optimizer campaigns to changes in your other campaigns.

Guideline 2: Look at the performance of your campaign in light of your goals for the Conversion Optimizer. Here are some example goals:

1. Maintain the same average CPA and get more conversions.
2. Decrease your average CPA and get more conversions than you would with CPC bidding, given the lower CPA.
3. Raise your average CPA and get more conversions than you would have while increasing your average CPA the same amount with CPC bidding.

You can shift your performance according to your primary goal by raising and lowering your maximum CPA bid. You can raise your max CPA bid if you want to increase traffic and conversions. If your average CPA is higher than you prefer, you can lower your bid, which will likely decrease both average CPA and the number of conversions.

Guideline 3: Keep in mind that changes in ad performance are natural, and you may need to use the Conversion Optimizer for some time to get an accurate understanding of its effects on your campaign's performance. For example, suppose a campaign normally receives 10 conversions per day, and it receives only 8 the day after it starts using the Conversion Optimizer. One would need to look at more than a day's worth of data to determine whether this drop is part of a long-term change in campaign performance; it could be natural for the campaign to have 8 to 12 conversions on any given day, but a change from 10 to 20 might not be natural.