Currently Google has a ton of bidding options for paid search, some of them include:
- Manual CPC
- Automatic bidding
- Enhanced CPC
- Max CPA
- Target CPA
Typically, as an agency, we tend to lean towards using CPA because we have found that across all types of different verticals and business models CPA has the best ROI. Also as an agency we tell our clients our plans for their account and whenever we make big changes, such as from CPC to CPA. Every once and a while we’ll get push back on not using CPA because the client is not comfortable with potentially not coming up every time in a certain position or for certain search queries.
In the past we would obviously not have a whole lot of choices if they didn’t want us to use CPA, as we have found that the automatic bidding is either a hit or a miss. But with the addition of Enhanced CPC in August 2010 you now have another option other than manual CPC and automatic bidding.
Basically, at least to this author, Enhanced CPC is CPA except instead of bidding per acquisition you’re bidding per click. Here is an overview of Enhanced CPC: “To use Enhanced CPC you will have to use Google AdWords Conversion Tracking on your campaigns. After Google has enough historical information, Google will automatically increase or decrease max CPC or default CPC values on individual keywords, ad groups or placements based on the likelihood of a conversion occurring. To do this, Google will attempt to predict the conversion rate using variables, such as: performance, match type, search query, user location, browser, language, time of day, day of the week and many more. Bid increases will never exceed 30%, while decreases have no such limit.”
I have had the pleasure in running numerous tests in the past on CPA and Enhanced CPC to find out which bidding option works the best, the result? Using CPA or Enhanced CPC is optimally better than using manual CPC or automatic bidding.
There are enough case studies on how much better CPA is than CPC, but in my opinion, not enough case studies on Enhanced CPC vs. Manual Bidding CPC, below are my findings after running a month long test on one particular campaign (the change was made on March 7th, 2011 at mid day):
As you can see we had all positive metrics: an increase in clicks, CTR, conversion rate and total conversions; while lowering the avg. CPC, total cost and cost per conversion in month over month comparables.
If you’re worried about using CPA or don’t want to wonder away from CPC, Enhanced CPC is obviously a viable option. If you would like a paid search consultation please contact us or call 877-676-2010.