The ROI Revolution Blog

Google Launches Enhanced CPC

August 17, 2010

enhanced cartoonGoogle released their latest addition to the bidding features family – Enhanced CPC. It’s been in beta since March, but Enhanced CPC officially launched yesterday, August 16th.

The premise of the tool, much like Conversion Optimizer, is to “boost your ROI with an easy to use, automated bidding tool.” Enhanced CPC will automatically adjust your max CPC bid based on the likelihood your ad will convert.

How It Works

For each auction Enhanced CPC calculates a predicted conversion rate using conversion data and other factors including:

Search Targeting:

  • Broad vs. Exact match type
  • Specific words that are present in the users query
  • Historical performance of your ads on the site

Content Targeting:

  • Historical performance of your ads on the site
  • Match quality between ad and site content
  • Current content on the site

User attributes:

  • Users location
  • Browser
  • Operating system
  • Language setting
  • Time of day

If a click is likely to convert, the system increases your max CPC bid – it may be increase up to 30%. If a click is unlikely to convert the system will lower you max CPC bid – there is no floor for lowering the bid.

What’s happening behind the scenes?

Initially the system only modifies bids in 50% of the auctions your ad is eligible for – remaining auctions are treated as a control group.

The system compares the performance of the modified bids against the unmodified bids and assesses whether or not it is having a positive impact on your conversion rate and CPA.

If performance is strong, Enhanced CPC will modify bids in up to 75% of auctions. Enhanced CPC continually monitors and optimizes its performance by keeping a portion of your traffic with your regular (not enhanced) max CPC bids. If it detects that it’s hurting your campaign performance, Enhanced CPC will automatically reduce its impact. Enhanced CPC will not completely stop modifying bids because at some point it could start performing better.

Why you might want to try it out:

The possibility of increased profits from spending money on clicks that are likely to convert and saving money on clicks that are unlikely to convert. Ideal results would increase your conversion rate while your CPA remains the same or decreases – improved ROI.

It’s very easy to try. On existing max CPC campaigns where conversion tracking is already installed all you have to do is check a box to get started.

It can save your time. Let the AdWords system automatically modify your max CPC bids to improve your ROI.

Lastly, Google is able to consider other factors that you have no way of knowing as an account manager and it factors those into its bidding decisions.

How to Set it Up

  1. On the Settings Tab of your campaign – click Edit next to Bidding and Budget.
  2. Choose Focus on Clicks and select either manual bidding or automatic bidding.
  3. Check the box underneath Enhanced CPC to enable.
enable enhanced ppc

As always, give your campaign a few weeks to run with Enhanced CPC before analyzing results.

Enhanced CPC Notes

  • Enhanced CPC works on Google, the Search Network and the Display Network.
  • With Enhanced CPC you can continue to manage and optimize your max CPC bids as much as you like.
  • When using Enhanced CPC with Automatic Bidding, the Automatic Bidding works as normal where the system will select a given bid. The Enhanced CPC system will use its technology to apply additional data to decide how much to increase or decrease the bid originally chosen by the automatic bidding system.
  • Just like Conversion Optimizer, Enhanced CPC requires Conversion Tracking.

Things to watch out for:

  • Enhanced CPC is not compatible with AdWords Editor.
  • The only indication that Enhanced CPC is running is on the Settings Tab, under the Bidding and Budget section – where you enabled Enhanced CPC.
  • There is no notification when the system begins to modify bids in more than 50% of auctions – it happens automatically with time and performance data.
  • A breakdown of stats across modified and unmodified bids in not available in the AdWords interface.

© 2002-2014 ROI Revolution, Inc. All rights reserved.