Google recently released a new product for Adwords that could change the way advertisers manage their spend on Search Marketing. The new product is called Conversion Optimizer and it allows advertisers to specify a CPA price for each click-through rather than to set a price per click (CPC). For example if an advertiser wants to spend no more than $1.00 per new customer they can tell Google that is all they want to pay, rather than to set a price per click when a click doesn’t guarantee a customer.
Google presented the Conversion Optimizer this week and here are my findings:
1 – Settings and installation
Conversion Tracker cookies are set in Google domain
Advertiser must opt-in to use Conversion Optimizer after tagging is complete and the data criteria are met.
- This will help gain advertiser trust – the product cannot be activated until the system is ready to optimize. This will set the correct expectations and minimize advertiser dissatisfaction.
Conversion Tag is javascript/pixel hybrid.
2 – Optimization method
CPA is a max CPA, not an actual.
- The CPA you set is just the maximum CPA Google will optimize to. It does not represent an actual goal.
Using conversion optimizer, bids are set at ad group level, not keyword.
- Setting bids at the keyword level gives the most granular control of your spend. Setting at ad group level may mean that spend is not managed efficiently.
No learning feature for Keywords that do not meet volume criteria.
- A feature of sophisticated SEM technology such as the Efficient Frontier platform is that keywords that do not have sufficient data can still be optimized. Conversion Optimizer is simply not able to optimize the long tail using this criteria.
Conversion Optimizer requires 200+ conversions in the last 30 days for each campaign you wish to optimize by CPA.
- This makes a lot of sense – the optimizer needs to understand past performance in order to affect future performance. While this is sensible it does mean any campaign that is highly targeted or gets little traffic will not be optimized.
Conversion Optimizer uses Adwords Conversion Tracking (this is independent from Google Analytics). Advertiser may use analytics AND tracking at same time.
- This means that advertisers must install two tracking tags on their webpages. Each additional tag adds to the weight of that page and can be difficult to maintain.
3 – Management and configuration
Not compatible with Ad Scheduler feature in Adwords.
- If you want to optimize by time-of-day and already use this feature, Conversion Optimizer will ignore those settings.
CPA is only set at campaign and ad group level, not at account level.
- If you have a single CPA goal that is measured at a global level you will need to change this in every campaign in your account.
CPAs cannot be set in Adwords Editor or through the API.
- Given that this is a free product, presumably aimed at the small business market, this should not be an issue. However if you use a 3rd party SEM software product you should check to see if it can set the CPA for you with their software.
4 – Other
Users that use geo-targeted campaigns will probably not be able to meet profiling criteria.
- This could be an issue for advertisers that set budgets for each geo-market. Budget controls in Adwords are set at the campaign level. Advertisers wanting to optimize geo-targeted campaigns that have low traffic will need to reorganize their accounts to commingle geo-targeted ads into the same campaign. This could be a lot of work but it will have a positive impact on optimization, albeit without the granular budget control.
Not suitable for advertisers that do not measure direct response online (offline conv or traffic are not goals).
- Conversion Optimizer only uses its own data. Google assumes that advertisers are not interested in optimizing by offline conversions. If you use your website to create leads and the actual sale occurs offline Google cannot optimize using that data.
No extra charge for conversion optimizer.
- This is a huge benefit, and I believe will be the primary driver for adoption. Compare this to Yahoo! Search Marketing: their campaign optimizer is only made available to top-tier clients that spend significant money with Yahoo!.
No weighting for different types of conversion. If a lead and a sale can happen in the same user session, it is counted as one transaction.
- This means that advertisers may find discrepancies between the number of conversion events recorded in Google Analytics vs. Adwords Conversion Tracking. Savvy advertisers track all conversion events and assign weights to each type of conversion based on their relative value. A lead is generally less important than an actual sale so you should ensure you give a different weighting to each type of conversion in order to optimize efficiently.
Google still has a separate “Pay per Action” product where advertisers can buy traffic at CPA prices. Conversion Optimizer just optimizes CPC spend to a CPA target, so you still get charged for each click.
- Obviously this is confusing, making it difficult to differentiate and decide which product you should use.
Case studies and testimonials available on website: google.com/adwords/conversionoptimizer
