Monday, August 16, 2010 | 3:26 PM
We're excited to announce the launch of Enhanced CPC, a new automated bidding feature that can help you improve your ROI on your campaigns with manual bidding. Enhanced CPC uses your campaign's historical conversion tracking data to automatically adjust your Max CPC bid based on the likelihood that your ad will convert. As a result, you should receive more conversions while maintaining or reducing your overall CPA and hopefully spend less time managing your Max CPC bids.
How does it work?
Let's walk through an example. Jeff sells model airplane kits and has enabled Enhanced CPC for a campaign that contains the following keywords, each with a Max CPC bid set to $0.30: model airplane, model airplane kits, and build model airplanes. When a user searches for 'model airplane kits,' the AdWords system recognizes that this term has converted well for Jeff in the past, and therefore increases the Max CPC bid to $0.32 for this specific auction. If the likelihood of a conversion is very high, Enhanced CPC can bid up to 30% above the Max CPC. This means that the most that Jeff will be charged for a click is $0.39.
On the other hand, when a user searches on a term that has not converted well in the past, e.g. 'model airplane,' the AdWords system will lower the Max CPC bid for this specific auction to $0.20. By adjusting bids based on Jeff's conversion data, the AdWords system ultimately helps him increase sales while maintaining or decreasing his average cost per conversion.
Enhanced CPC has the unique ability to consider a number of factors when predicting the likelihood of a conversion. A few examples of what Enhanced CPC is able to do include:
- Adjust your bid depending on how well a particular search or display network partner site in the Google network has converted for you in the past
- Recognize when specific words within a keyword (e.g. 'kits') convert well and adjust your bid when users search on variations of these terms (e.g. 'model airplane kits for children')
- Detect attributes such as the user's location, language settings, browser, and operating system and analyze how these attributes may impact the likelihood of your ad converting
To use Enhanced CPC, you'll need to first enable Conversion Tracking for your campaigns. Conversion Tracking not only allows you to take advantage of ROI-boosting features like Enhanced CPC but also provides you with valuable insight into how frequently your ads convert into sales and how much you're paying for these conversions.
If you're already using Conversion Tracking, getting started is easy. Simply navigate to the 'Bidding and Budgeting' section of the settings tab for your campaign, and select the checkbox under 'Enhanced CPC.'
If you're choosing between Enhanced CPC and Conversion Optimizer as your method for boosting ROI, please read this FAQ for more information on how these tools differ.
Visit the Google Ad Innovations site to learn more about Enhanced CPC.
Posted by Dan Friedman, Inside AdWords crew