Google’s Conversion Optimizer is a free Adwords feature that allows you to manage your campaigns by your cost per acquisition (CPA) bids rather than your cost per click (CPC) bids. I’ve only been running Conversion Optimizer for a few weeks – so this is my beginner’s guide to getting started.

In order to utilise Conversion Optimizer you must have conversion tracking implemented and your campaign must receive at least 200 conversions a month.

You are able to set a maximum amount (for each ad group) that you are willing to pay for each conversion and then Google automatically adjusts your CPC in order to meet that CPA.

Setting it up is easy – go to campaign settings > click on view and edit bidding options > select radio button Conversion Optimizer > save and continue.

You will be taken to a page listing all your ad groups and a block for each one to fill in your max CPA.

Initially Google will recommend a CPA for you according to how that ad group has been performing in the past. It is usually higher than what you were originally achieving. I would suggest that if you’re just starting out with Conversion Optimizer, stick with what Google recommends. Making the bid much lower than what Google recommends at the start may cause your traffic to decrease, which will cause your conversions to decrease – which is what you don’t want!

Once you’ve been running it for about a week (and you have some data to work with), gradually start dropping the CPA, as you would with your CPC’s, and you’ll probably find you’ll be paying a lower CPA for the same amount of conversions – you just have to constantly optimise according to what the traffic is doing; as is the case with all AdWords campaigns.

To document my progress I have included stats on one of the client campaigns I have started Conversion Optimizer on:

So far clicks, impressions and CTR performance have improved.  You’ll notice however that while conversions have increased, CPA has gone up by 37%! 

Google initially recommended a max CPA of R12.35; I altered this slightly to R12.00 or R10.00 for most of the ad groups. Google is currently getting me a CPA of R11.14, and I’m getting more conversions.

I have now lowered almost all of the ad groups to a max CPA of R10.00. I’ll post some stats up in about two weeks to see how it pans out - whether we lose conversions, or keep them for a lower CPA.