Enhanced Cost Per Click (CPC)

The question of whether to let AdWords handle your budget for you in the name of conversion goals is a tough one to answer. Do we trust these features? Are they more effective than manual bidding practices? When a typical online marketer asks these questions they will probably be thinking of Conversion Optimizer, and the available Enhanced CPC feature can often be overlooked.

How Does Enhanced CPC Work?

Each time an ad is activated, the maximum CPC on keywords or placements will be automatically increased or decreased, based on the chances of a conversion being achieved. The following variables are considered to predict the conversion rate:

  • Location
  • Browser
  • Language settings
  • Time of day
  • Day of week
  • Words in search query
  • Match type
  • Historical performance

Bids can be increased by up to 30%, and there is no limit to decreases.

Initially, Enhanced CPC will take effect on 50% of the auctions entered into. After gaining enough data to analyse performance of the feature one of two further steps will be taken. If it has been found that it has not benefited performance of the campaign, it will reduce its effect, but will not stop running entirely. If it has had a positive impact on the campaign, it will start to modify bids on up to 75% of auctions entered into, and if positive impact on modified bids continues 100% of the auctions will be affected by Enhanced CPC. There is no notification given when the feature starts to modify more than 50% of the auctions.

How is Enhanced CPC Enabled?

Activation within a campaign that has conversion tracking is simple. Within your AdWords account, go to Bidding and budget section under the campaign Settings tab and click “edit”. Then check the box under Enhanced CPC that is labelled “Use my conversion tracking data and bid to optimize for conversions”.

It can also be activated within AdWords Editor on the Campaigns tab, by selecting the drop down under Enhanced CPC to change from “Disabled” to “Enabled”.

How Does it Differ to Conversion Optimizer?

Enhanced CPC gives marketers more control, as they can override bid manually or use external bid management systems, whereas Conversion Optimizer does not allow continued management of CPC bids.

Conversion Optimizer is not limited to the 30% rise in bids that Enhanced CPC is. Conversion Optimizer lets you set a target CPA which it will work towards. Enhanced CPC does not take into account this goal.

Where Conversion Optimizer can only be implemented if the campaign has received 15 conversions within the past 30 days, Enhanced CPC does not have this requirement.

Who Should Use Enhanced CPC?

The feature appears to be a useful tool for experienced marketers who would like to benefit from automated bid management to maximise conversion rates, but retain the ability to control the bid themselves as well.

Because, unlike Conversion Optimizer, a campaign does not have to meet certain conversion requirements before it can be implemented, consideration must be taken into account as to whether the campaign is suitable for Enhanced CPC to be running. Enabling it on a campaign that is young or unstable could have no effect or negative results.

As with any automated feature (like Conversion Optimizer and Automated Rules), careful analysis is needed to ensure that the business KPI’s are not being affected negatively – particularly traffic received, as the limitless decreasing of bids may see it dwindle.