by Jennifer

01/03/2011

Internet Marketing

Optimise for Conversions – New Ad Rotation Option Available in AdWords

Introducing Optimise for Conversions

On Wednesday 23rd February, Google announced the launch of a new ad rotation method in AdWords called Optimise for Conversions. This can be applied to all campaigns with Conversion Tracking enabled that have accumulated conversion history. Previously there were just two options available:

  • Optimise for clicks – shows ads that are expected to generate greater click volume more frequently
  • Rotate – shows ads more evenly

With this new setting, Google takes a look at historical ad performance and show those ads more frequently that are likely to generate the most conversions.

According to Google’s official blog, this new feature comes in response to demand from advertisers who have widely experienced (us included) that ads with the highest click through rates don’t always result with the highest conversion rates.

Whilst it’s great that Google have responded in this way by providing an ad rotation option that lends itself to greater conversion volume, we are somewhat dubious and have yet to get excited about this new feature.

Here’s why:

  • Optimise for Conversions may negatively impact Quality Score. Bearing in mind that one of the main determining factors of Quality Score is clickthrough rate (CTR), the up weight of ads with low CTRs could potentially harm performance – pushing up average click costs and increasing overall conversion costs.
  • Optimise for Conversions does not take cost of conversion into consideration. It literally focuses on conversion volume rather than efficiency. Unless monitored carefully, this could potentially lead to a situation where
    actual cost per conversion exceeds the target (or maximum cost an advertiser is willing to pay per conversion), resulting with a reduced profit margin or even a loss on the activity.

Without wanting to sound too negative however, we recognise completely that time-limited advertisers are likely to be grateful for the automation that this new feature brings.

In addition, it may be that we’re proven wrong and find that Google does in fact make the right decision each time, resulting with improved overall performance and more time for us PPC mangers to focus on other areas of campaign optimisation (hooray!). Either way, testing is really the only way to find out.

We’ve changed the settings for a selection of our campaigns and will report back on the results in 4 weeks’ time – including any impact on Quality Score and overall cost efficiency. Whatever the results, they’re bound to be interesting!

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