Joel Pinkham

Google has just announced Enhanced CPC bidding

As days go by, I’m losing trust in Google’s bidding methods and feeling like I need to use a third party bid management tool. But let’s take a look at the options we have using AdWords:

1. CPC Manual Bidding
2. CPC Manual Bidding with enhanced CPC
3. CPC Automatic bidding
4. Max CPA
5. Target CPA

I’m not even going to bother talking about Manual Bidding (it’s obvious), Automatic Bidding (never, ever use this) or Max CPA (why would you use Max CPA when you get use target CPA?).

Enhanced CPC

You set the bids and Google tries to assume if the actual users search query is more likely to convert (which makes smart bidding).

Advantages

• Individual bids for a lot of different search queries  – your keyword listed in AdWords will match a multitude of user search terms. So instead of setting up a huge campaign with a lot of exact match terms with individual bids, it does that work for you
• It finds patterns it what converts – let’s say your keywords are “gifts”, “birthday gifts” and “gifts for dad”. Enhanced CPC might find that when the user adds “buy” to their query they’re more likely to purchase, and when they add “ideas” then they’re less likely. You might be bidding $2 for “gifts”, but when someone searches “buy gifts” Google puts your bid to $3, or when someone searches “gift ideas” your bid goes to $1

Disadvantages

• You give Google permission to increase your CPC at their will, based on their assumptions (they say it won’t raise for cost-per-conversion, but of course it would for your high performing keywords)
• Google makes assumptions very quickly – they can get it wrong to start with

Target CPA

You set the end amount you want to spend on a conversion at an ad-group level.

Advantages

• You don’t have to worry about bidding and Google “tries” to meet your conversion expectations
• Let’s you focus on things like creating new ad groups & testing new ad copy – where you (as a person) can add real value
• Computers are smarter than humans when it comes to calculation

Disadvantages

• It starts out bad – everytime I’ve started using Target CPA on a campaign my CPC gets massive. It comes back down but overall not all that trustworthy
• You’re relying on Google to maximise your revenue, when they also want to maximise their revenue
• You could actually be better a better cost-per-conversion but the system will push your bids up to your target (meaning all of your ad-groups need

In Conclusion?

I’m testing out Enhanced CPC now on 1 of my campaigns, and will see how it goes. Target CPA needs time to really test out but none of them really match ROAS bidding like you can do with a bid management tool.

Getting onto the first page of Google for organic search results is usually going to be quite a challenge. That’s where Google AdWords comes in – and it’s the easy way to get that ranking.

However, these days are coming to an end and it seems that ranking on paid search results is becoming more and more of a challenge. Especially with a quality score to filter out the terrible ads that don’t actually add value for users.

I recently have been working on a campaign for a client – targeting highly competitive terms. I did all I could on the campaign in terms of optimisation and bid a huge amount on the keywords. The result? The ad showing up a tiny portion of when it should, driving 2 clicks a day, a huge cost per click and a ‘Poor’ quality score.

So I discussed with issue with a Google Optimiser – and they essentially said there was no solution but to wait for improvement. But in doing so they gave me a good description of the way quality score was working in this case.

Here’s a summary of the impact of quality score in this situation

• When you don’t have enough data for your own quality score – you get the average of other advertisers for that specific keyword. In my case, there are a ton of dodgy advertisers which will not be relevant for users so overall have a poor quality score.
• When there’s lots of competition, you absolutely need a good quality score to get displayed. My ads were put in the place of a bad ad and therefore not showing up.
• The only way to improve quality score is to prove that your ad is of quality to Google. You can only do this by showing valuable clicks and beat the average performance for that keyword by other advertisers.

This basically means I’m stuck in a rut, as I’m sure many other advertisers are who actually are selling a good quality product. No solution yet either.