Choosing the perfect bidding strategy for your Google Ads campaigns is the most confusing thing ever. You get to select from 8 options with obscure names. You never really know if Google is pushing you towards the best option or simply trying to get more money out of you. The whole process just sucks...
But you stood strong! You ignored all the automatic bidding and narrowed down your options to Manual CPC. Now for the final choice:
Do you want enhanced CPC: YES or NO?
Until October 2018, saying YES meant that you allowed Google to raise your bid by up to 30% if it thought it could drive more conversions.
As Google improved, it added more targeting options such as location, gender and age. Obviously, the behaviour of a 25-year-old man in London is completely different from a 65-year-old woman in South Wales. So conversion rates varied drastically. The 30% cap did not make sense anymore and was removed at the end of last year.
This is all good in theory, but a lot of advertisers saw wild movements of their cost per click and conversion costs.
Has Google gone completely cuckoo?
It’s now even more important to understand what enhanced CPC actually does. How will it affect your bids? How can you make the most of enhanced CPC and scale your business?
When you click YES, this is what happens:
The last step is a stressful time for advertisers. Your daily cost can skyrocket for a few days and quite often your conversion cost will jump up too. This is because Google is basically guessing which keywords could work and putting your ads at a higher position on the search engine to reach more visitors.
Sometimes it works and you convert, sometimes it doesn’t. When it converts, Google keeps the pattern in its memory bank and remembers to show your ad in the future at lower bid levels. When it does not convert, Google decides to never show your ad again for that keyword. I’m simplifying an extraordinarily complex algorithm here, but that’s the idea...
So, you’re sat there relaxing... You were quite happy with all your conversion levels and then suddenly all your costs go up! It feels like you’re losing control of your account. It’s easy to fall into panic mode: change your bidding, unclick the enhance CPC box, change your bidding to CPA or even pause keywords…
So many of Google Ads mistakes are made by reacting too quickly to an unexpected movement. You make a change that you’re not too sure about, you get a negative reaction in your stats, and then you make silly decisions.
The key here is to keep calm and dig deep into your search terms report.
When you get there, rank your search terms by average CPC. I bet you can see some really high click-through rates (CTR) for those keywords… ??!!! ;-) Google did an awesome job! It chose new keywords, it raised the bids for these keywords to make sure your ads were seen and when users saw your ad, they clicked on it. Wow, thank you, G!
Now, these keywords don’t always convert or they may convert at a higher cost. That’s why you’re seeing jumps in your stats and that’s okay. What Google has done is accelerated your data learning phase. It has thought of lots of keyword combinations and shown your ad to see what happens.
Google has not given you a list of recommended keywords by theme or by the type of business it thinks you are running. With enhanced CPC, Google has given you a list of keywords that work really well with your ads. This information is GOLD!
Now it’s fun time! Export your list, make sure you only keep the most relevant keywords (high CTR) and get SKAGing!! ;-)