We've heard your requests for a cost-per-acquisition (CPA) bidding tool so we're excited to introduce a new AdWords feature: the Conversion Optimizer beta. Conversion Optimizer helps you meet your ROI objectives by automatically managing your bids according to a maximum CPA goal. By automating the bidding process, this feature helps you minimize your conversion costs while saving you time.
FAQ - [adwords.google.com...]
Since they have visibility into the overall keyword bidding environment, Google could take advantage of expected bid vs. actual cpc relationships for different positions in ways that no external optimization system could, but such a system would not serve to maximize their own revenue.
Does Google provide transparency into the actual bids they are pushing up?
Brava_seo, why did you decide to turn it off so quickly?
Thanks for your input on this!
Here's something I wrote on my blog back in November 2006:
"I'm over in London today meeting with our UK team as well as some clients that we've recently signed and who were previously using an SEM firm who in turn used idBay uddyBay (and you thought I only spoke two languages). For all the bravado and swagger with which said SEM firm/bid tool carries themselves across the UK and European search market, what I learned was shocking if not for the fact that I've seen it a hundred times.
So we went into the client's AdWords campaign and look at what reports had been run in the past, and it quickly became clear that the advertiser's "buddy" had never actually run either an impression or average position report.
This, folks, is proof positive that said SEM was neither looking at or making use of the data needed to model cost, revenue and volume trade offs for the advertiser's search campaign.
This *should* be shocking, but the reality is it's what we see 50-75% of the time in the States and 90%+ in Europe. SEM's here have had such an easy living the last few years that they've never actually had to build or do anything of value. Agency rebates from the SE's have, in and of themselves, made agencies look good.
As I told an unfortunately sparse crowd at SES Paris yesterday, European advertisers' revenue growth and margins from search *will* start to plateau in the coming months and quarters, and that will force advertisers to cast a more critical eye on their SEM providers and keyword management technologies.
Put another way, if your investment manager didn't look at the trading volume, 50/200-day moving averages or historical earnings reports of the stocks he bought for you, you'd either fire him or go broke."
Do a search on Google for
searchquant "history of bid management" and click on the first result, which will take you to a video wherein I talk about the history of rules-based bid management tools (of which BidBuddy is one).
Just my $0.02
Google already knows enough about our business and as soon as they have a definitive idea as to what we're willing to pay per conversion they instantly have a bead on our potential profitability--and what they can and can't charge charge us.
I personally feel this type of info should be kept from all of the SE's at all costs--we keep all revenue figures out of Adwords, Analytics, etc for this specific reason. I mean, I know it's probably all a lost cause at this point but I'd rather not hand them our most proprietary info on a platter if I can help it.
We pay enough per click already :(
Taking a quick look at the Google service I saw the following-
-requires 300+ conversions in the last 30 days. This may be a high hurdle for advertisers to cross.
-advanced features like preferred bidding, adv bid scheduling and use of adwords editor are not supported. This is likely just because of the product's infancy but these tools are necessities for advertisers looking to do this on their own without the help of another third party.
-I am assuming the conversion values being passed back into the conversion optimizer are not very detailed, or at least advertisers cannot make use of passing detailed data. Say you want to optmize CPA or ROAS from a conversion profit aspect, I don't know if that can be easily accomplished.
I mean, I know it's probably all a lost cause at this point but I'd rather not hand them our most proprietary info on a platter if I can help it.
Then don't do it. Never ever do it. At least not with real numbers.
You can send any value you want to any tracking script including the Google one. Try sending a value that is a conversion value * .5 and see if it cuts your CPC down. If it does go down then send conversion value * .25 and see what happens. You'll of course still know the real numbers.
JAG
Verrrrrry interesting concept!
As I normally do when WebmasterWorld is discussing a new AdWords feature or tool, I will forward your feedback (regardless of whether it is positive or otherwise) to the right folks - so please know that your comments will be heard. In point of fact, I sent them the link yesterday. ;)
A quick note to bava_seo, who wrote:
I have changed my keyword bids using conversion optimizer tool but iam not satisfied with that tool ,so i would like to know how to insert previous bids for the keywords as they were before.
I would like to disable conversion optimizer because [...] I have changed all the bids replaced by conversion optimizer tool.
Please note that when one disables Conversion Optimizer and goes back to MaxCPC the system will have 'remembered' the previous settings, and will automatically revert to the old CPC bids.
In case you're not familiar with how or where to disable Conversion Optimizer, here's some info from the AdWords Help Center:
How do I start (or stop) using the Conversion Optimizer?
[adwords.google.com...]
Excerpting from that page:
To disable the Conversion Optimizer, follow these steps:1. Sign in to your AdWords account at [adwords.google.com....]
2. Select the checkbox next to the appropriate campaign or campaigns.
3. Click Edit Settings.
4. Under the Advanced Options section, click View and edit bidding options.
5. On the Bidding Options page, select your new option.
6. Click Continue.
7. On the confirmation page that follows, you can choose your settings, then click Save Changes.
AWA
Is there an equivalent ROI reporting tool in the current system? I don't just want Conversion costs and rates, I'd be after cost => actual conversion value to me (if that makes sense).
Thanks
cpa target = 100 actual cpa = 200 bid on keyword should be reduced with 50%
problem 1
what numbers should be taking into this calculation?
At least 200 clicks before google makes any(!) adjustment to the bidprice.
problem 2
seasons
In june my cottages convert different then in oktober.
clicks in the near past count more then clicks in the far past.
problem 3
Tech neirds
don't put as much BS in this tool as other companies did.
problem 4
my bank account
If you need more advice, fly me in!
Total overall sales down about 20% (but this is day-by-day rather than weekly) - this could be seen as a 'normal'. Prices for the items I sell are subject to relatively high competition and will fluctuate.
All the following are comparisons with a daily average.
Total Adwords expenditure for the newly altered campaign - 30% higher
Total conversion percentage - more or less the same
Total conversion cost - approx 15% more expensive
Total number of conversions - more or less the same (so far)
--
Not convinced yet - but I'll hold out and see what happens over the weekend. Maybe :p
Not convinced yet - but I'll hold out and see what happens over the weekend. Maybe :p
Try lowering the reported conversion amount. Maybe (amount * 0.75) and see if the costs come back down.
I'd love to try it but I don't use the feature myself. But I, and a couple others here, are curious to know if it'll lower the costs :-)
JAG
1. Miaoux,
If your total sales are down 20% while total spend is up 30%, how can your cost of conversions have only increased 15%, or did I miss something? I'm the biggest knuckle-head on this forum, so it's possible.
2. JAG - if you passed a conversion value of <[Real value], will Google send you to detention?
3. Bava_seo, you said "google is going be more beneficial and rich - NOT WE." - That may well about sum it up.
From the WE camp,
Shorebreak
Sorry for not being clear enough when writing:
To summarise:
I'm currently testing keyword: 'apples' (with CFA)
Adwords also has campaigns for other fruit. Overall sales for fruit were down about 20%.
All the other vague numbers were about apples :)
2. JAG - if you passed a conversion value of <[Real value], will Google send you to detention?
Ha! Only if they can see the real numbers in your accounting program.
JAG
before i start, i must admit i'm a Vendor. i hope you'll be willing to read through and cooperate :-)
i'm working in a company that built a robust solution to optimize NET PROFIT on e-commerce/lead gen/affiliate AdWords campaigns. we are averaging an increase in profits of 30% within 4 weeks.
our main two advantages, as we see it, are (before this optimizer came out...):
1. fully automated decision making system, that chose and perform bids for you and take each keyword to the optimal position (optimal in terms of NET PROFIT).
2. not like most of the optimizing SEMs out there, we do so for every campaign size (although the statistical effect is starting somewhere in the 100 conversions a month per account range) . We take no min. monthly fee or a set up fee. Simply 3% of spend, after our first month free trial.
my questions for you are as follows:
1. do you think pitching for NET PROFIT optimization instead of CPA optimization is appealing? Is the difference clear? Is it understood that having a fixed CPA will not bring you to your max margin overall, since at CPA thinking, you don't consider sales VOLUME, only cost per click VS. conversion rate?
2. Google approach- are they trying to replace SEM companies (service and/or enablers) by giving full solution to their advertisers? or is it just a nice feature they put there and will not improve it further?
3. is there a place for the channel to tell the advertiser how much to pay them? isn't it a conflict if they bid for two direct competitors on the same time?
Thanks for sharing a though, i'm wondering how this will affect us...puzzled
Booster
[edited by: Booster at 8:42 pm (utc) on Oct. 4, 2007]
1. do you think pitching for NET PROFIT optimization instead of CPA optimization is appealing? Is the difference clear? Is it understood that having a fixed CPA will not bring you to your max margin overall, since at CPA thinking, you don't consider sales VOLUME, only cost per click VS. conversion rate?
Not really all that appealing but I'm not a sales person. I'm sure it is a good part of the pitch.
2. Google approach- are they trying to replace SEM companies (service and/or enablers) by giving full solution to their advertisers? or is it just a nice feature they put there and will not improve it further?
I have no doubt Google would like to do it but I don't see how they can when it is in their best interest to NOT optimize to a minimum spend. The best campaign for them is one where the advertiser makes just enough money to justify keeping the campaign running. Advertisers want a lot more than that.
3. is there a place for the channel to tell the advertiser how much to pay them? isn't it a conflict if they bid for two direct competitors on the same time?
Good question...don't know.
JAG
