Free: Assessment Does your website build trust with buyers and bring in revenue?

Score My Website
Close

Free: Assessment

Does your website build trust with buyers and bring in revenue?
Take this free 6 question assessment and learn how your website can start living up to its potential.
Score My Website
inbound-marketing-strategy-playbook-cover

Free: Assessment

Google Adds Pay-Per-Conversions Making Ads More Budget-Friendly

By Dan Baum

Google Adds Pay-Per-Conversions Making Ads More Budget-Friendly

Anyone running Google Ads knows that one of the most important metrics involved in your budget is cost per click, but what about your cost per acquisition or CPA?

This measure how much ad-spend it takes to get one conversion on a given campaign, ad group, or keyword, and Google just changed how we view this very important metric.

Last Thursday, Google announced the availability of conversion-based bidding for display campaigns called “Pay Per Conversion.”

What this means is that instead of paying when a user sees or clicks on an ad, a company would only pay upon conversion on the following page.

In other words, you basically only pay when a user completes a desired action clicking an ad.

Here is the official announcement from Google.

So What Does This Mean for Your PPC Campaigns and Google Ad Accounts?

Marketers need to sit up and pay attention because this flips paid advertising on Google on its head.

With the new bidding options, advertisers are no longer paying for actions that don't always result in value for the company.

With PPC, regardless if a user bounces or not when they click an ad, the advertisers pay and we’ve been forced to have an “it is what it is” mentality.

However, now, advertisers won't feel like they're just throwing their money away.

This shift will force advertisers to focus on optimizing their user experience when someone clicks an ad.

This will not only make users happy, but give Google another source of ad revenue. It will also reward advertisers for providing the right users the right information.

How Do I Get Started?

The update went live last week, so you should see which of your ads are eligible to run CPA bidding.

In order to be eligible your account must have more than 100 conversions in the past 30 days. The time between initial click and conversion also has to be less than 7 days for greater than 90% of those conversions.

To see your account’s historical data on these measurements, you can segment data in Google Ads from the past 30 days or longer by Conversions > Days to Conversion.

Once you know if you are eligible or not, the bidding operates similarly to how search campaigns work now with advertisers setting a “Target CPA” under the bidding options of the display campaigns.

Google described how the new bidding options work:

“Let’s say your target CPA is $10, and you drove 30 conversions over the weekend. You’ll pay exactly $300, with an actual CPA of $10.”

It works in the same way that bidding on a cost per click does; You will never pay MORE than your set target cost per acquisition.

The goal here is to generate as many conversions possible at that target number.

And don’t be discouraged if you are ineligible right now!

Google says that eligibility is refreshed daily, so once your conversions increase you are free to participate.

Who Would This Work For?

Using a target CPA would work best for high volume campaigns, where the product or service sold is clear.

For example, if a conversion in your ads account means a purchase, use your average cart size to calculate a target CPA that gives you a big enough margin to remain profitable. The max bid on a CPA is around $200 right now.

There are some restrictions, too.

For example, advertisers cannot use pay for conversion and bid toward offline conversion types. These include import from clicks and store visits. Pay for conversions also does not work for conversions imported from calls or Salesforce or for cross-device conversions.

A More Level Playing Field

The entire idea is brand new, so we will keep an eye on how companies are using pay per conversion in the future, but we’re excited to see more options when it comes to paid advertising on Google.

In the long run, it seems that larger companies with more conversions will shift a lot of their budget towards CPA instead of PPC.

This will desaturate a lot of industries, allowing smaller companies with smaller ad budgets to get their ads in front of more potential customers, all for a lower cost per click. This is a huge move for accessibility and creating a more level online playing field. 

Free: Assessment

Does your website build trust with buyers and bring in revenue?
Take this free 6 question assessment and learn how your website can start living up to its potential.

Topics:

Search Engine Optimization
Paid Media
Published on December 17, 2018

Recent Articles

9 SEO Best Practices for Stronger Organic Traffic in 2023
November 18, 2022 • 12 min read
Video SEO: How To Optimize Videos To Drive Traffic to Your Website
May 9, 2022 • 8 min read
37 Eye-opening SEO Statistics To Nail Your 2022 Search Strategy
April 28, 2022 • 10 min read
10 Reasons Why Your Website Is Not Ranking In Google
February 10, 2022 • 15 min read
Google Shares New Tools to Audit Website User Experience
August 12, 2021 • 3 min read
Google: Website Content Quality More Important Than Quantity
August 10, 2021 • 3 min read
How Long Tail Keyword Research Can Drive Business
August 9, 2021 • 7 min read
How to Optimize Videos On Your Business Website for Search
July 23, 2021 • 4 min read
Google: 'Here's how to prepare for the future private web'
July 16, 2021 • 4 min read
Too many internal links in content can confuse Google about site structure
July 9, 2021 • 5 min read
Google July 2021 core update rolling out over next 2 weeks
July 2, 2021 • 4 min read
Inbound Marketing Help: My Traffic And Leads Are Down. What Can I Do?
June 28, 2021 • 5 min read
Finally, Google page experience core update is rolling out
June 18, 2021 • 3 min read
What is a Featured Snippet? [Definition + Examples]
June 10, 2021 • 4 min read
Google June 2021 core update live, July core update coming
June 4, 2021 • 3 min read
Google's June page experience core update will be mobile first, then desktop
May 21, 2021 • 3 min read
Google confirms demise of Q&A search feature, Question Hub lives on
April 26, 2021 • 1 min read
Big Google algorithm update moved to June with new performance report
April 21, 2021 • 4 min read
No, changing page publish dates won't increase Google search rankings
April 10, 2021 • 4 min read
Google: 'zero-click search' claims and data 'misleading'
April 5, 2021 • 6 min read
3 quick SEO fixes that will increase your website rankings right away
March 30, 2021 • 5 min read
10 Google Analytics metrics you absolutely must track (updated)
March 29, 2021 • 5 min read
Meet the new Google My Business review management view
March 20, 2021 • 2 min read
Google Ads help: Top 10 reasons your Google Ads campaigns are failing
March 10, 2021 • 10 min read
Google 'price drop' structured data for e-commerce can grab buyer eyes
March 9, 2021 • 2 min read