Hi Guys, My client is in the mortgage industry. There average Max. CPCs range from $15-30, but Avg. CPCs actually come out to around $5-12 dollars. We know in a basically bidding formula that Max. CPC is (Desired CPA x Conv.Rate). However, If I did that formula, my max cpcs would drop from $25 to like a $3 in many cases. They wouldn't even show on page 6 with that. So my question is...... what BID FORMULA can I use to optimize towards a CPA when the spread between my Max CPC and Avg. CPC is sooooo high.
The difference between, Max CPC & Avg. CPC should not a be a concern for you. I think you are most concerned about the showing your ads on higher position ( Ad rank) and how much you should bid(Max CPC) for that position: The formula is Ad-position = Max Bid X Quality Score. So, if you want to show your ads on higher position without increasing the cost, then you should increase the quality score . And this depends upon many factors like Keywords, ads & Landing page relevancy CTR Account history ( there might be some more factors) Hope it will help you Thanks Anil Adwords Certified Professional
The best thing to do in this case would be - if you can - track conversions through a pixel, and set CPA bids for the campaign on the settings tab. The CPA bids apply on the Ad Group level, not keyword level - so better have your ad groups "tighten". There are 2 options in CPA bids: "Max CPA" and "Target CPA". Choose "Target CPA" - this way Google will try to produce more conversions within the Bid amount you've determined. If you set CPA bid to $20/conversion Google will eventually bring the maximum amount of conversions for $20 a piece. In case the conversion rate is too low - the volume will ultimately drop - but otherwise it's a good way to avoid the non-linear bidding model you're describing.