Paid Search

Review Your Bidding Options on Google AdWords Christine Churchill , KeyRelevance.com Dallas, TX - Apr 26, 2011

Over the years Google has added more options to theadvertiser through the Google AdWords user interface. One area that is oftenoverlooked is the bidding options available to advertisers. Depending on yourgoals, conversion history, campaign complexity, niche competitiveness, and anumber of other factors, you may chose from a variety of differentbidding options to best match your goals. Since most of these options are notshown unless you click on the "Advanced" link, you may not even be aware that these biddingoptions exist.

Bidding Options Overview

When setting up a campaign, Google offers different biddingstrategies for the advertiser depending on which networks they are advertisingon and their conversion history. If you navigate to the Campaign settings and goto the Bidding and budget section, you will see the following options:

1. ManualBidding for Clicks

Manual bidding is the traditional and the default mode. You payonly when a visitor clicks on your ad. You set a Maximum Cost-Per-Click whichis the maximum bid price you are willing to pay for a click on your ad. Thismethod focuses on clicks and allows you to specify different bids for each adGroupor for individual keywords. In this method Google takes your Max CPC and thenranks your ad based on Quality Score and other factors, not to exceed your MaxCPC.

2. AutomaticBidding

Another option is Automatic Bidding. It also focused on clicks, but here you set a daily budget and AdWords delivers as many clicks as it can while stayingwithin your budget. Like the manual bidding, this bidding strategy focuses onclicks. With the automatic bidding option, Google adjusts your bids automatically to provide the most clicks possible while still staying within the budget you specified. You specify a Cost Per Click bid limitwhich restricts Google from going over that bid while delivering clicks within your budget. This frees you from needing tomicro-manage bids for each keyword, but also removes the control that manualbidding provides.

3. EnhancedCost Per Click

Enhanced Cost Per Click is a form of automated bidding that takesthe Max CPC that you set and works with all the settings in yourcurrent campaign to achieve a goal of delivering an ROI boost. Unlike theConversion Optimizer method, there is no minimum conversion requirement to usethis method, so a brand new campaign could elect to use this option. This option requires that the Google Conversion Tracking code be properly installed and running on the appropriate landing page(s) on your site.

4. Conversion Optimizer focuses on Conversions

Conversion Optimizer is afree advanced bidding option that is only available to some accounts. Toqualify you must have conversion tracking enabled and the campaign has to havehad at least 15 conversions in the last 30 days. This bidding optionusually works best when the conversion event is well defined, like a purchaseor a signup.

The advantage of using the ConversionOptimizer is that it can tap into multi-dimensional bid management -- meaningGoogle can consider other factors not available in the User Interface such as: operatingsystem, screen resolution, geo-location within your geo-targeted campaign, etc.and can optimize the performance based on specific characteristics of eachbid auction. Essentially, Conversion Optimizer is Google's version of automatedbid management. The tool takes your conversion tracking data and creates aprediction model to anticipate which bid auctions will perform best for you in thefuture. The factors Google uses are beyond those directly available in your account.

When setting up conversion optimizer, youcan choose to set either a Max CPA (not to be exceeded by any conversion) orTarget CPA (the average CPA target for all conversions) bid. You can also usethe Conversion Optimizer on campaigns running on the Display Network for bothplacement, targeted and keyword-targeted campaigns. Conversion Optimizer canactually vary the bid by target site. Using the Target CPA option will get youmore conversions for a given target. In our experience, using the Max CPA leadsto an average CPA of about 70% of the Max CPA target.

If you decide to experiment with theConversion Optimizer, try to make only small, incremental changes to yourcampaign and don't remove any conversion tracking codes from your website. Besure to compare your performance under Conversion Optimizer with your performancebefore you enabled it. You can always choose to turn off the Optimizer and your campaign will revert to the previous CPC bids you were using.

5. Focuson Impressions Bidding - Manual CPM Bidding

This option is for image adson the Display Network only. The Focus on Impressions option allows you tocontrol the visibility of your ads by adjusting your maximum CPM (cost per one thousand impressions). If your goal is to increase thevisibility of your ads on the display network for branding purposes, thisbidding option may be a good choice for you.

Test andCompare Results

The biddingoptions allow you greater flexibility. In many cases thesimple manual CPC bidding may be delivering a great return. In other cases,where the competition has grown and there is a good amount of conversionhistory, you may feel the potential for higher ROI returns that makethe Conversion Optimizer bidding option a more attractive choice. Your mileage will vary, so it is best to test.

Christine Churchill is the President of KeyRelevance.com, a full service Dallas search engine marketing company that specializes in helping businesses succeed online. Christine and her experienced team of online marketers provide a holistic approach to marketing: increasing a site's visibility online, improving the user experience on the site, and maximizing the site's conversion potential.