Enhanced CPC – Google’s Latest Tool For Lazy PPC’ers

So, Google have launched their latest time-saving measure for Adwords account managers, ‘Enhanced CPC’.

Where their standard bid optimization is completely automated, this option allows you to set your bid, and they’ll adjust it based on the conversion rate. The tool will increase your bids up to a maximum of 30% above your bids, though there does not appear to be a minimum.

The bids are adjusted in order to maximise the number of conversions that you achieve for your current CPA. If this is done correctly, then assuming that nothing changes in terms of the performance of your account due to external factors, then theoretically the number of conversions achieved at the same CPA should improve.

Which is all very nice, but I do have a few concerns…

1. If the tool works, you’ll spend a lot more money. Is this made obvious to the advertiser? It’s inevitable that if you get more conversions at the same CPA, then you’ll spend more.
2. Since this tool will spend more of your money, what happens if you’re already spending your full budget? Since your cost can’t increase, and your CPA won’t change, you should see no difference in your conversions.
3. What happens if your market changes? Seasonality can change your conversion rate significantly, as can a number of other market-specific factors, and circumstances within your individual business (such as stock levels). If your conversion rate drops, you’ll get fewer conversions (obviously), but Google will then kick you while you’re down, lowering your bids to hit your target CPA, and reducing your conversions further. Ouch!
4. Perhaps the most critical question of all, and the one that I ask whenever Google rolls out a new automated tool, ‘WHY?’ Why would you use this tool? Think about it. How long does it take to adjust your bids based on their performance, and how often does it need doing? If you spend a huge amount of cash, you may need to adjust your bids every day or two – but in that case, you should be either doing it manually, or using an expensive, cutting edge tool (depending on the complexity of the account). If you aren’t spending that much cash, you should only really be adjusting your bids occasionally – maybe every week or two. Otherwise, you’ll just be responding to random variation. How long does this really take? An hour? Two? Doesn’t the amount that you’re spending on Adwords justify that much of your time?

The truth is that assuming that you can crunch the numbers yourself, you will perform better than an Adwords automated tool. You can choose how far back to look when assessing the performance (balancing the volume of data with its recency), and if certain Ad Groups are performing better or worse, you can decide whether to increase the bids on the good groups, reduce the bids on the bad groups, or both. You can choose whether to spend more, or to use the improved performance to reduce your spend whilst retaining the same level of conversions, or to spend the same and pick up more conversions for your money.

Seriously, I don’t see who this tool is aimed at. Clearly, agencies shouldn’t touch it – after all, they are being paid to manage the campaign as well as possible, not with as little effort as possible. Perhaps it’s aimed at small companies who want to advertise on Adwords, but how are they even going to find out about it? It’s an option hidden away in the account settings, so unless they are subscribers to the Adwords blog, they will probably never know about it.

I don’t believe that this is just another ‘Google Money Grabber’. Assuming that it works in the way that it says that it does, it will certainly increase spend, but the user will be getting extra conversions for their money. I won’t be trying it on any of the campaigns that I manage – our clients pay for better service than that – but it’ll be interesting to see what sort of results the people that do try it get…