AdWords Advertisers Can Now Optimize By Conversions

Feb 24, 2011 at 3:22pm ET by Pamela Parker

Optimizing based on click-through data? That’s so 2010. Google is now letting AdWords advertisers automatically optimize what ads display most based on conversion rates.

“We’ve always encouraged you to test multiple ads in each ad group, and we’ve offered our help by showing ads with the highest clickthrough rates more often,” the company wrote in a blog post. “However, some of you have told us that the ad with the highest clickthrough rate isn’t always the ad with the highest conversion rate and that you’d like to be able to optimize for conversions rather than clicks.”

To take advantage of conversion optimization, advertisers must have conversion tracking activated in their AdWords accounts, as data from that tool will be used to determine what ads drive the most conversions. When Google doesn’t have enough conversion data — such as when a new campaign launches — it will default to click-through optimization.

Advertisers with conversion tracking can find the new settings under Advanced settings on the Settings tab of any campaign. If it’s enabled, it will apply to all ads on Google, as well as on the search and display networks.

Related Topics: Channel: SEM | Google: AdWords

About The Author: Pamela Parker is a contributing editor for Search Engine Land and Executive Features Editor at Marketing Land. She’s a well-respected authority on digital marketing, having reported and written on the subject since 1998, including a stint as managing editor of ClickZ. She’s also worked to help monetize independent publishers’ sites at Federated Media Publishing. She blogs about media and marketing at The River and about cooking, gardening and parenthood at Free Range. She can be found on Twitter as @pamelaparker. See more articles by Pamela Parker

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http://www.linkedin.com/in/arnoldk/ Arnold AK

Interesting news. Intrigued if the algo will be based on solely conversion / conversion rate or if it will involve the ad CTR into the equation to some extent.
http://baynote.com boaz

Advertisers should be careful not to over-rely on conversion data. Many businesses realize multiple site visits, often through different marketing channels, prior to conversions. By over-displaying conversion-driving ads and under-displaying acquisition- and persuasion-driving ads, advertisers may increase total conversion rates but may also substantially reduce their total revenue or conversions.

If ads are driving website engagements that don’t result in same-session conversions, then advertisers should consider continuing to fund the ads or risk losing customers to the competition.

This boils down to attributing credit to paid-search ads appropriately, beyond single visits.
http://www.searchmuse.com Paul Morris

nice and about time however arnold and boaz above give some good words of warning.
http://www.adwords-adviser.co.uk/know-adrian AdWords Adviser

Letting Google loose to find as many conversions as possible sounds like a good idea. But, what about the cost of these conversions? There is no way of capping the cost of a sale. You could therefore find your CPA increases. Bad news if you operate on tight margins!
Luis

At first glance it seems obvious that all advertisers would like to set their ads so the version that creates the most conversions is the one that gets served most frequently. But in reality this might not necessarily be the right setting to bring you the lowest Cost per acquisition and the highest number of conversions. The entire search to conversion path involves several different calculations, not just the click to conversion rate.
Take a look at this post: http://www.eustondigital.co.uk/optimize-conversions-ad-setting-campaigns/
Kind Regards