Enhanced CPC = Increased ROI + Lower Cost-Per-Conversion

- September 22, 2010

Google AdWords has released a new automatic bid management feature, called Enhanced CPC, which is designed to increase your ROI on Max Cost-Per-Click (CPC) campaigns, while maintaining or even reducing your overall Cost-Per-Conversion.

How it works:
Google analyzes your CPC campaign’s historical conversion tracking data along with factors such as user search query, geography, time of day, web browser or operating system. Then, when your ad is eligible to appear, it will automatically raise or lower your Max CPC bid based on the probability that your ad will convert. If your ad has a high chance of converting, your bid can be raised as much as 30% over your Max CPC bid, and lowered if a different ad has a higher percentage of converting.

Unlike other optimization efforts from Google AdWords, this new automatic bidding feature works with ad scheduling, position preference and demographic bid multipliers. Enhanced CPC also works on Google Network Partners (AOL, Ask, etc.) and Content Advertising. However, the feature is not available in AdWords Editor.

As a Campaign Manager, I have started using Enhanced CPC for some e-commerce clients and have seen an increase in transactions without any other changes. For one client, I experienced a 39% increase in transactions with a 45% decrease in Cost-Per-Conversion, along with a 9% decrease in advertising spend.

Enhanced CPC gives you the winning formula for your ad to receive more conversions, without increasing your Cost-Per-Conversion, and eventually increasing your ROI.

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