Q& A With Andrew Silverman, Product Manager For AdWords Conversion Optimizer

One of the power-packed tools inside AdWords is the Conversion Optimizer, which will help you reach Cost Per Action (CPA) goals using Google Conversion Tracking on your account. One of the best features of Conversion Optimizer is how easy it is to engage and manage. To start, go to your campaign settings and choose “Change Bidding Strategy”. From there, you get three options: manual bidding, Conversion Optimizer, or Budget Optimizer. Manual bidding is your normal “you set the bids” account and the Budget Optimizer is usually for newer users who turn over their budgets for Google to spend.

Although many of us use external SEM bid management solutions to help reach our campaign goals, most AdWords advertisers do not use third party tools so the Campaign Optimizer is a fantastic way for the average user to optimize their account. Google holds a lot of historical information about your account so you might assume they should be able to optimize most accounts fairly well.

I thought it would be nice to hear more from Google about this feature, so Andrew Silverman, the product manager for this tool was kind enough to share with us some of his insights.

Q&A with Andrew Silverman, AdWords Product Manager

Q. Tell me a little about yourself. What is your role with Conversion Optimizer?

Andrew: I’ve been at Google for over a year now and I’m a product manager working on bidding features. Bidding is an important aspect of AdWords, so we are always trying to come up with new ways for advertisers to more easily and efficiently use the system and get better ROI.

Since Conversion Optimizer came out of beta about a year ago, it’s been fun to watch the usage grow. We’ve seen some of our advertisers give the product a try on one campaign or two and then quickly expand to all or most of their campaigns when they see the performance gains.

Q. What is Conversion Optimizer and how does it work?

Andrew: Conversion Optimizer is a free bidding feature in AdWords. It allows you to specify your bid as a cost per acquisition (the most you want to pay for a conversion) instead of a cost per click (the most you want to pay for a click). It works with our Conversion Tracking feature to tell us which clicks converted so we can match up your advertising performance with your bid.

A way to think of Conversion Tracking is that you are telling us which clicks were most valuable to you. This is great information since we can go back, look at those clicks and work to get more of them for you in the future. For example, maybe your ads are appearing on a broad match term that is getting you great performance – it’s a term you’d never think to bid on but it is exactly what a certain segment of users is looking for. Conversion Optimizer works to get you more of those valuable clicks.

Conversion Optimizer goes even a step further and looks at more aspects of the clicks. Were they a broad match? What was the exact query it matched to? Which content site or AdSense for Search partner? What was the topic of the page the ad appeared on?

By considering all these different dimensions and seeking more of the most valuable clicks while trying to avoid clicks which are less profitable, Conversion Optimizer is able to improve the performance of a lot of advertisers, even if their bids were efficiently managed. As a result, advertisers might see a double-digit increase in conversions without increasing their cost per conversion at all.

Q. What was the genesis of the feature?

Andrew: Google is constantly updating and improving our advertising offerings based on advertiser feedback. We developed Conversion Optimizer to be even more precise in the ways that we deliver high quality leads to our advertisers. Conversion Optimizer allows for us to show the ads users are looking for – not just the ones they will click on, but the ones that will give them the information they need to ultimately make a decision.

Increasingly, marketing is becoming more measurable and we’re looking to give marketers constant feedback so they no longer have to guess how their campaigns are performing or what consumers want. With tools like Conversion Optimizer, marketers are given precise feedback on the value of their campaigns – enabling them use their budgets most efficiently.

Q. Is Conversion Optimizer fit for everyone to use?

Andrew: Conversion Optimizer is useful for a lot of our advertisers, but not all of them. It is really helpful for direct response advertisers – those with online conversions that can be measured through Conversion Tracking. Online conversions can be anything from a purchase to a user filling out a form. To make sure we have enough data to do a good job for the campaign, we require the campaign to have enabled Conversion Tracking and have achieved 50 conversions in the last 30 days before using Conversion Optimizer.

Q. What are some tips/tricks that you’d like to pass along to a new user of the tool?

Andrew: Take the recommended bid. When an advertiser first turns on Conversion Optimizer for a campaign, they are presented with a recommended bid. This is the bid that is approximately equivalent to your current CPC bids and will get you about the same level of traffic. When you are new to Max CPA bidding with Conversion Optimizer, it can be hard to guess the right starting bid. That’s why the recommended Max CPA bid is usually a good place to start and then you can tweak up or down from there, after you have a sense for how well it is performing.

Experiment Often. When I think about the advertisers I’ve worked with, the ones with the most success experiment often and pay close attention to their data. Trying Conversion Optimizer for a few days is the best way to get a sense for how much it can improve your ROI. (It’s easy to turn off quickly if you change your mind). The most important metrics to look at are the effects on your average cost per conversion and the number of conversions. Also, it’s a great idea to constantly experiment with small changes to your max CPA bids or max CPC bids to see how that affects your profit.

Shallow conversions. A trick that can be useful for a lot of advertisers (whether they are using Conversion Optimizer or not) is to define some shallow conversions and bid based on them. By shallow conversion, I mean some kind of event that is indicative of high user engagement or a valuable click, but is not necessarily what you ultimately consider a conversion.

If you are bidding on your own, usually you have a few keywords with a lot of traffic and a lot of keywords with less traffic (maybe one or two conversions a month). Since it’s hard to know how well those keywords are performing based on so little data, a great trick is to look at an event that happens more frequently. An example might be a user adding an item to a cart or passing through the first step of a multi-step conversion process. You know those are valuable clicks so it can be very useful to optimize for them if your ultimate conversion doesn’t have enough data.

Defining these frequent conversions also gives Conversion Optimizer more data to work with, so it can improve your performance or make it so that the campaign has enough data to qualify.