Enhanced CPC and CPA Models: Could AdWords Do More?

By Kaitlyn Smeland Dhanaliwala | Aug 23, 2010
More Articles by Kaitlyn

Image from "Google Ad Innovation: Enhanced CPC" Video

Last week, AdWords released a new automatic bidding feature called Enhanced CPC which…

“…dynamically raises or lowers your Max. CPC bids to acquire more conversions at or below your current CPA.”

The fact that Enhanced CPC automatically raises and lowers bids in order to improve conversion data led to some initial confusion between this new feature and the AdWords Conversion Optimizer.

In a recent post, I detailed all the similarities and differences between Enhanced CPC and the CPA model.  One of the similarities is that both systems take into account certain “likelihood of converting” metrics for each individual search query.  And one such metric is the relevance of a particular broad-matched search query to the account keyword.

Although Enhanced CPC does sound like a useful tool that offers a bit more control than the Conversion Optimizer, the release of this new feature sparks a broader question for Google: Why not go a step further? Why not bring the “likelihood of converting” metric for broad-matched search queries into the main campaigns settings section for all advertisers?

I mean, any good PPC manager has already been mining Search Query Reports for some time, identifying un-targeted search queries that have been eating up budget and then adding them as negatives for the future.  But Google clearly has a system of identifying in real time which broad-matched search queries are not likely to convert- so that they’re not bid on in the first place.

So advertisers now have the choice between (1) Conversion Optimizer, (2) manual CPC bidding, and (3) Enhanced CPC bidding.   But I’d like to see yet another check box in the campaign settings section: “Do not bid on broad-matched search queries with less than X% chance of converting.”

We now know that Google has that targeting capability, but will they put it in the hands of individual advertisers?  What do you predict?

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