The Conversion Optimizer introduced by Google AdWords in September is now out of beta. Along with this development are some improvements that would benefit AdWords advertisers in increasing profits and saving time. Conversion Optimizer is a free AdWords tool for managing CPA (cost-per-acquisition) bids.
Now that the Conversion Optimizer is out of beta, AdWords is making it available to any campaign with AdWords Conversion Tracking enabled. Ad campaigns which have received 200 conversions can now also use the Conversion Optimizer compared to before when 300 conversions were required.
So when the Conversion Optimizer is used by, an advertiser just need to specify a maximum CPA bid which is the highest bid that advertiser is willing to pay per ad conversion. The Campaign Optimizer would then use historical information about the advertiser’s campaign, searching for optimal CPC bids per auction. The Conversion Optimizer uses algorithms then predicts which clicks yields higher conversion and automatically bids on these clicks. The algorithm based its bids on the advertiser’s conversion history as well as considers the website in the Google network where the advertiser’s ad appeared.
The Inside AdWords blog gave a good example of how Conversion Optimizer works:
For example, let’s say an advertiser with a custom shirt website gets a higher conversion rate from the search query custom shirts than from just shirts. The Conversion Optimizer learns this difference and bids higher for clicks on custom shirts. By reducing the risk of over-bidding for non-converting search queries and under-bidding for potentially valuable search queries, the Conversion Optimizer can help improve performance substantially. Based on our analysis of the Conversion Optimizer beta, advertisers using this feature have seen more conversions at a lower CPA.