CPA bidding for AdWords is a feature of Conversion Optimizer, a tool that uses historical performance to decide the relative value of clicks on different ads, and set the Cost Per Click Bids on those ads accordingly. If your AdWords trends continue, Conversion Optimizer will make the average cost per conversion come in at under or on your maximum CPA bid.
Here’s A Quick Tutorial
When Trends Do Not Continue
Unfortunately, there are a huge number of variables outside of Conversion Optimizer’s control. These can include bid changes or effective ads by your competitors, shifts in your market, and changes to your website.
When trends change, CPA bidding and the Conversion Optimizer are broken. You can very likely end up paying more per conversion than your maximum bid.
If there’s any constant in online marketing, it’s that trends change. What you want to do is make sure they change in a way that keeps your CPA below your max bid.
Conversion Rate Optimizing to Positively Impact Trends
Keep your CPA below your bid with the following best practices:
- Evaluate your conversion metric. Different industries have different definitions of “conversion.” Some of these conversions may not be helpful metrics. For example, some companies define “conversion” as any phone call made by a potential client, even if phone calls often do not result in a sale. This means that you’re optimizing for the wrong thing. For all you know, Conversion Optimizer is deliberately optimizing for “window shopper” customers who are unlikely to make a purchase. Make sure that the data you’re putting into Conversion Optimizer actually relates to your bottom line. Relevant data in, good results out.
- Identify how your back-end conversion process works. Is there a specific type of customer who converts more often after they have called or signed up for a free trial? Or does it appear to be totally random? Is the issue with your sales staff and back end, or with the kind of leads that your website generates?
- Work on your landing pages. Specific landing pages can increase your conversion rate by up to 25%, while high-quality landing pages can increase it even more.
- Only A/B test small changes, but A/B test a lot. A/B testing can dramatically affect your conversion rate. However, testing too many large changes at once can cause unforeseen problems. In a case study at Marketing Land, one marketer describes the unforeseen consequences of sweeping changes to a website design. In a nutshell, in streamlining the entire conversion process and reducing detail and user qualification, the marketer accidentally decreased the quality score and conversions per contact.
- Use advanced conversion optimization. Do not just rely on initial visits by customers to cause conversions. Instead, use cheap and provably effective drip marketing campaigns to keep customers coming back. For pennies worth of content, you can use newsletters to turn a single click into several conversions.
AdLuge can help with back-end optimization, landing page optimization, drip campaigns, and the collection of more relevant data.