Ultimate Guide to Conversion Rate-Based Bid Modifications
Conversion rate-based bid modifications help you adjust your ad spend to target the most effective audience segments. By tailoring your bids based on performance data, this strategy ensures your budget is directed towards users and settings that generate the best results. For example, you might increase bids for mobile users if they convert better than desktop users or lower bids in underperforming locations.
Key Highlights:
- Why Conversion Rate Matters: Higher conversion rates mean more value from your ad spend. The average Google Ads conversion rate is 3.75%, but top campaigns exceed 10%.
- Benefits: Smarter budget use, improved ROI, and a stronger competitive position.
- Strategies: Choose from manual CPC, Enhanced CPC, or Smart Bidding (e.g., Target CPA, Target ROAS). Automated methods use machine learning to optimise bids in real time.
- Implementation Steps: Start with manual bidding, ensure accurate conversion tracking, and gradually transition to automated strategies. Regularly monitor and refine your campaigns.
- Advanced Techniques: Use data analysis, real-time adjustments, and machine learning for precision. Track metrics like conversion rate, CPA, ROAS, CTR, and Quality Score to measure success.
By focusing on conversion data and aligning bidding strategies with your goals, you can maximise campaign efficiency and profitability.
Google Ads Bidding Strategies Explained: When to Use & When to Switch
Key Bid Strategies Using Conversion Rate Data
Building on the basics of conversion rates, let’s explore how to apply this data effectively through various bid strategies.
Manual CPC, Enhanced CPC, and Smart Bidding: A Breakdown
Manual CPC gives you complete control over your bids. You can set bids at the campaign, ad group, or keyword level, allowing you to manage your ad spend with precision.
Enhanced CPC (ECPC) offers a middle ground between manual bidding and automation. This semi-automated strategy adjusts your bids based on the likelihood of a conversion. For instance, Google’s system may increase your bid slightly when it predicts a higher chance of conversion or lower it when the chances are slim.
Smart Bidding takes automation to the next level by using machine learning to optimise bids in real time. It considers multiple factors like device type, location, and time of day. Smart Bidding includes several strategies tailored for conversions:
- Target CPA: Focuses on achieving a specific cost-per-acquisition.
- Target ROAS: Aims to maximise revenue by targeting a return on ad spend.
- Maximise Conversions: Seeks to generate as many conversions as possible within your budget.
- Maximise Conversion Value: Prioritises the total value of conversions rather than their number.
According to Google’s 2021 data, Search campaigns using Maximise Conversion Value with a target ROAS saw a 14% increase in conversion value, while Standard Shopping campaigns with Target ROAS achieved gains of up to 30%.
"The best way to maximise your ad spend is to prove value and scale based on those results. Proving value will come with constant testing in your ad account, especially with bidding strategies."
– Ian Dawson, HawkSEM Search Engine Marketing Manager
These strategies provide a solid foundation for deciding when and how to use conversion-focused bidding techniques.
When to Use Conversion-Focused Strategies
Using conversion data effectively can boost both the efficiency of your campaigns and your return on investment. These strategies are most useful when your goal is to drive specific actions, such as sales or sign-ups, rather than just increasing traffic. They work particularly well for high-volume campaigns where there’s plenty of conversion data to analyse.
Target CPA is a great choice if you need to acquire leads at a fixed cost. It helps maintain consistent acquisition costs while maximising the number of conversions.
Maximise Conversions works well for businesses aiming to generate as many conversions as possible. It’s particularly effective during sales or promotional events when volume takes precedence over individual conversion costs.
Target ROAS is ideal for campaigns focused on maximising revenue. It provides clear visibility into the value of conversions, ensuring your ad spend delivers a profitable return.
For campaigns centred on brand awareness, strategies like Target Impression Share may be more suitable. The key is aligning your bidding strategy with your overall marketing goals. Conversion-focused strategies are especially effective for businesses with a high volume of conversions or for campaigns where manual bid adjustments are impractical.
"The strategy with ads and marketing, we try to be as proactive as possible. If you’re reactive, you’re just waiting for someone else to do something for you to copy."
– Selom Agbitor, Co-founder, Mad Rabbit
What You Need for Successful Bidding
To make these strategies work, accurate conversion tracking is essential. You’ll need to track all valuable actions and ensure your campaigns generate at least 15 conversions per month to enable Smart Bidding. For new accounts with limited data, starting with Manual CPC can help build a foundation before transitioning to automated strategies.
Clearly defined campaign goals are crucial. Whether your focus is lead generation, sales, or brand visibility, having specific objectives allows the system to optimise bids effectively. Understanding your customer journey also ensures you’re tracking the most meaningful actions.
If your business values different types of conversions differently, value-based bidding can help. This approach prioritises higher-value actions, maximising the overall value of your conversions. Keep in mind, machine learning needs about 1–2 weeks to adjust and optimise your bidding strategy, so avoid making frequent changes during this period.
How to Set Up Conversion Rate-Based Bid Modifications
Setting up conversion rate-based bid modifications involves a structured approach to ensure your campaigns are both efficient and effective.
Step-by-Step Setup Process
Start with manual bidding to manage your budget while gathering essential performance data. Organise your ad groups around specific themes or product categories, aiming for about 20 keywords per group. This level of focus ensures your bid adjustments are informed by relevant and actionable metrics.
Before making any bid adjustments, ensure conversion tracking is in place. Track all key actions, such as purchases, sign-ups, or phone calls. Without accurate tracking, your modifications will lack a solid foundation.
When applying bid adjustments, do so methodically. Adjustments can vary widely:
- Device adjustments: Range from -100% to +900% at both campaign and ad group levels.
- Location adjustments: Range from -90% to +900% at the campaign level.
- Other factors: Demographics, ad scheduling, and remarketing lists for search ads (RLSA) also support adjustments between -90% and +900%.
Keep an eye on your Quality Score during this process. Even a one-point improvement in Quality Score can reduce your cost-per-click by up to 16%. To achieve this, create tightly focused ad groups with engaging ad copy and optimise your landing pages for relevance.
Once you’ve gathered enough data, consider transitioning to automated bidding strategies. Keep in mind that these strategies often require a learning period, so avoid frequent changes during this time.
With your bid adjustments in place, fine-tune your targeting by focusing on audience segmentation.
Audience Segmentation for Better Results
After setting up your bid framework, refining your audience segmentation can further improve your campaign’s performance. Targeting specific groups effectively can lead to higher conversion rates and a stronger return on investment. For instance, VERB Brands segmented affluent consumers into three distinct groups – digitally disconnected individuals, traditional luxury buyers, and luxury advocates – resulting in a 36% increase in inbound leads, a 221% growth compared to the previous year, a 53% boost in website traffic, and a 27% expansion of their email list.
Here’s how to optimise your audience segmentation:
- Leverage first-party data: Use insights from your CRM, website analytics, and customer interactions to create meaningful audience segments. This data reflects actual customer behaviour, helping you make informed targeting decisions.
- Refine with demographic and geographic data: Different age groups, locations, and income levels often show distinct conversion trends. Tailor your bids to focus on high-value segments while reducing spending on less profitable ones.
- Use behavioural targeting: Base your targeting on user actions and preferences. For example, customers who have previously purchased or interacted with specific product categories are more likely to convert again. Dynamic ads that adjust content based on these behaviours can significantly boost relevance and performance.
- A/B test regularly: Experiment with different audience segments to fine-tune your targeting and improve ROI. Consistent testing helps you identify what works best for each group.
- Review and update segments: Use performance data and market trends to adjust your segments every few months.
Managing Conversion Rate Changes
Once your bid modifications and audience segments are in place, managing conversion rate fluctuations is crucial to maintaining performance. Sudden changes in conversion rates can disrupt campaigns, especially if Google’s Smart Bidding algorithm struggles to adapt to shifts exceeding 30%. This can lead to overspending and reduced returns.
Here’s how to manage these changes effectively:
- Use Seasonality Bid Adjustments (SBAs): Inform Smart Bidding about expected changes during specific periods. Analyse past trends to predict conversion rate changes, and apply negative SBAs if you anticipate a drop of more than 30% to prevent overbidding.
- Adopt a conservative approach: It’s better to underestimate the impact of seasonal changes and adjust later rather than risk overspending. If changes are under 30%, the algorithm can typically handle them without SBAs.
- Segment campaigns by type: Manage SBAs separately for different campaign types, such as branded search versus generic product campaigns. This ensures adjustments are tailored to each campaign’s needs.
- Increase daily budgets during peak periods: Prevent budget constraints when conversion rates spike, especially during high-demand seasons like the holidays. Break these periods into phases – ramp up, first peak, danger zones, and second peak – and adjust budgets accordingly.
- Monitor key metrics: Regularly track click-through rates, cost-per-click, and conversion rates to identify shifts in competition or market conditions. For example, a drop in conversions could indicate reduced impression share, fewer clicks, or issues with your website experience.
- Consider manual CPC for transitions: During periods like rebranding or website migrations, historical data may lose relevance. Manual bidding offers greater control, allowing you to adapt quickly during flash sales or competitor promotions.
"Manual CPC bidding provides granular control over individual keyword bids and various dimensions rather than a one-size-fits-all automated approach." – Experienced PPC manager
Analyse a full week’s data (Monday to Sunday) to identify meaningful patterns. Focus on high-impact terms and make incremental changes rather than drastic shifts. Regularly reviewing your bids ensures consistent performance and optimisation.
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Advanced Optimisation Techniques
Once your bid adjustments are running smoothly, it’s time to explore advanced methods to get even more out of your campaigns. These techniques let you squeeze the most value out of your conversion data while staying ahead of market shifts.
Data Analysis to Spot Trends
Analysing trends turns raw data into actionable insights for smarter bidding strategies. The trick is diving into historical data to uncover patterns that signal market movements.
Start by collecting data on past bids, market reports, cost trends, and competitor actions. This historical context helps you anticipate market changes and adjust your approach proactively instead of reacting after the fact.
"With data, you’re not just guessing what might happen; you’re predicting what WILL happen. It’s your secret weapon for making smarter, faster, and more accurate bids."
Focus your analysis on identifying the best-performing combinations of audience, banner, message, offer, and landing page. Roman Vinogradov, VP of Product at Improvado, explains how this works:
"Improvado analyzes your campaigns, identifying the most effective combinations of audience, banner, message, offer, and landing page. These insights help you build high-performing, lead-generating combinations."
Segment your audience by demographics, behaviours, or interests to tailor your messaging effectively. Comparing your performance to industry benchmarks can also provide context. For instance, the average PPC conversion rate across industries is 2.35%, while Google Ads typically performs slightly better at 3.75%. High-performing campaigns often exceed a 10% conversion rate.
Recent data highlights some key trends: click-through rates improved by an average of 5% across industries in 2024 compared to 2023, but cost per click rose for 86% of industries, with an average increase of 10%. Conversion rates dropped slightly in 12 of 23 industries, with only a 1% average decline, while cost per lead increased by about 25% in 19 industries.
Regularly review search term reports to understand which queries are triggering your ads. Use this information to adjust your spending and refine your strategy. Tracking performance over time allows you to spot what’s working and what needs fine-tuning. This data-driven approach sets the stage for real-time decision-making.
Real-Time Bid Adjustments
Real-time adjustments can supercharge your campaigns by constantly tweaking bids, placements, and budgets based on performance. Keep an eye on key metrics like click-through rates, conversion rates, and engagement to ensure you’re getting the best results.
Ian Dawson, Search Engine Marketing Manager at HawkSEM, stresses the importance of ongoing testing:
"The best way to maximise your ad spend is to prove value and scale based on those results. Proving value will come with constant testing in your ad account, especially with bidding strategies."
When using automated bidding, monitor the system closely and make manual adjustments when needed. Experiment with different bid strategies to strike a balance between staying competitive and keeping costs in check. Dawson also offers advice on collecting meaningful data:
"By monitoring performance, you can decide to adjust your maximum conversions/target CPA to ensure more conversions or monitor your historical CPC to adjust your manual bidding to pay less for clicks. With any testing, strive for statistical significance and ensure that you are collecting enough data to inform your decisions."
As you make real-time changes, don’t overlook factors like ad quality and brand safety. These considerations, combined with advanced algorithms, can make your bid adjustments even more precise.
Using Machine Learning for Better Precision
Machine learning takes bid optimisation to the next level by automating and refining strategies. AI and predictive analytics are especially effective for improving conversion-focused bidding. Companies using AI-powered ads report 30% more sales at a 20% lower cost, and AI-driven bidding can boost conversions by 35% compared to manual adjustments. Additionally, advertisers using AI tools report a 40% reduction in manual bid adjustments.
Google’s Smart Bidding is a prime example of machine learning in action. It uses "auction-time bidding" to optimise for conversions or conversion value in real time. This approach can increase conversion rates by up to 35% while reducing costs. Machine learning excels at identifying high-potential audience segments and predicting which ad creatives will drive the most engagement. Predictive analytics can further enhance ROI, typically improving it by 20% to 25%.
To make the most of machine learning, ensure your conversion tracking is accurate. Align Smart Bidding settings with your business goals and test them against your current strategies. AI tools can also automate tasks like audience segmentation and generating dynamic ad creatives. With real-time performance monitoring, AI algorithms can adjust bids, placements, and budgets on the fly.
Measuring Performance and Avoiding Common Mistakes
Once you’ve fine-tuned your bidding strategies using advanced techniques, the next critical step is to measure performance accurately. This ensures your campaigns continue to deliver results and meet your business goals.
Key Metrics to Track
To gauge your campaign’s success, focus on metrics that directly affect your revenue and overall effectiveness.
- Conversion Rate (CVR): This measures the percentage of users who click on your ad and complete a desired action, such as making a purchase or filling out a form. A high CVR typically indicates quality traffic and an effective landing page.
- Cost Per Acquisition (CPA): This tells you how much you’re spending to acquire a single customer. For context, the average CPA in Google Ads across industries is around £39. If your CPA surpasses your customer lifetime value, it’s time to revisit your strategy.
- Return on Ad Spend (ROAS): This metric shows how much revenue you earn for every pound spent on ads. It’s a direct indicator of how well your ad spend translates into business outcomes. As one expert explains:
"We monitor Google Ads performance on a daily basis, focusing on the clients’ KPIs. Usually, within our pool of clients, this is conversions and/or cost per conversion. Ultimately, the key is to test different strategies and adapt based on performance, regardless of the budget size."
- Click-Through Rate (CTR): With an average PPC CTR of 3.17%, this metric reflects how engaging your ad is. A low CTR often signals the need to improve your ad copy or refine your targeting.
- Quality Score: This score, ranging from 1 to 10, evaluates how well your keywords, ads, and landing pages align. A score of 7 or higher is generally considered effective.
As another industry leader highlights:
"For our clients, the KPIs are pretty simple: It’s leads, revenue generated, and Cost Per Acquisition. Our clients are typically local, service-based businesses and thus don’t care too much about brand awareness or percentages. The marketing dollars need to translate to top-line revenue, and so it’s our job to help our clients connect the dots to that in our reporting."
To stay on track, set realistic goals and focus on KPIs that align with your business priorities. Using PPC monitoring tools can help you identify trends and adjust strategies proactively.
Common Problems and Solutions
Avoiding common mistakes can save you money and keep your campaigns on the path to growth. Here are some frequent pitfalls and how to address them:
- Impatience during the learning phase: Google’s algorithms need time to collect data and optimise performance. As Karly Scott, Manager of Strategy at Logical Position, explains:
"Perfecting your PPC bidding strategy is an ongoing process that takes time and effort."
- Faulty conversion tracking: Without accurate tracking, you’re flying blind. Ensure that key actions, like purchases or form submissions, are tracked correctly. You might also consider third-party tools for call tracking to get a complete picture.
- Irregular performance reviews: Regularly evaluate your campaigns – weekly or bi-weekly, depending on their scale and budget. Michelle Morgan, Co-Founder at Paid Media Pros, advises:
"Make a schedule, keep to it, and you’ll get the most from manual CPC."
- Incorrect bid adjustments: Adjusting bids by percentage, rather than flat amounts, helps maintain balance across keywords and audiences.
- Misaligned bidding strategies: Some bid strategies, like those focused on conversions, require sufficient data to function effectively. Use these only when your campaign has enough historical data to support them.
- Neglecting negative keywords: Regularly review your search terms report to weed out irrelevant searches. Adding negative keywords prevents wasted spend on low-quality traffic.
- Seasonal changes: Don’t ignore seasonality. Adjust your bids and budgets to reflect shifts in demand throughout the year.
- Blind reliance on Google’s recommendations: While Google’s suggestions can be helpful, always evaluate them critically to ensure they align with your specific goals.
Comparing Different Bid Modification Methods
Choosing the right bid modification method depends on your campaign goals, resources, and data availability. Here’s a breakdown:
| Bid Modification Method | Advantages | Disadvantages | Best For |
|---|---|---|---|
| Manual CPC | Complete control; instant adjustments | Time-consuming; prone to errors | Small campaigns; tight budgets |
| Enhanced CPC | Combines manual control with automation | Limited optimisation; still needs oversight | Mid-sized campaigns transitioning to automation |
| Target CPA | Focuses on cost efficiency; scalable | Requires conversion data; less individual control | Lead generation with consistent conversion values |
| Target ROAS | Revenue-focused; maximises profitability | Needs accurate value tracking; complex setup | E-commerce with varying product values |
| Maximise Conversions | Automated; conversion-focused | Can overspend; less cost control | Flexible budgets; volume-driven goals |
| Maximise Conversion Value | Revenue-driven; uses advanced algorithms | Requires precise value tracking; unpredictable costs | High-value transactions; profit-driven goals |
Manual bidding gives you full control, while automated methods leverage algorithms to optimise performance. Enhanced CPC strikes a balance between the two. The key is testing different strategies to see what aligns best with your objectives.
To ensure you’re investing wisely, track ROI, organise keywords by intent, and conduct regular A/B testing. These steps will help you identify the most profitable areas and fine-tune your approach for long-term success. By combining the right bid strategy with detailed performance tracking, you can achieve meaningful results in your campaigns.
Conclusion and Key Takeaways
Conversion rate-based bid modifications bring a sharper focus to PPC management, transforming clicks into meaningful conversions. Here’s a quick rundown of the benefits and actionable steps to make the most of this approach.
Why Conversion-Focused Bidding Matters
The shift to conversion-focused bidding offers both immediate and long-term benefits. One major advantage is improved budget efficiency. Automated bidding strategies can cut ad spend by up to 24% while maintaining – or even boosting – performance. This is achieved by directing your budget towards segments that actually convert, rather than just generating clicks.
Additionally, programmatic and AI-powered bidding not only improve efficiency but also increase conversions. The global real-time bidding market is expected to hit £39.61 billion by 2030, growing at an annual rate of 16.0%. This growth highlights the increasing importance of data-driven strategies in advertising.
What’s more, this approach ensures your ad spend is aligned with actual business results. Instead of chasing vanity metrics like clicks or impressions, you’re focusing on actions that drive revenue. Considering that PPC campaigns typically deliver £2 for every £1 spent, this strategy is key to achieving sustainable growth.
Steps to Boost Your Campaign Performance
To make the most of conversion rate-based bid modifications, follow these practical recommendations:
- Start with manual bidding: Collect enough data to understand your audience’s behaviour before transitioning to automated systems. This foundational step helps you make informed decisions later.
- Focus on data quality: Accurate data is critical for effective bidding. Without it, even the best algorithms will fall short.
- Optimise your website’s performance: Pages that load within 0–2 seconds have the highest conversion rates. A fast, seamless user experience can make a huge difference.
- Keep monitoring and adapting: Automation doesn’t mean you can go hands-off. The real-time bidding market, which reached £18.8 billion in 2024 and is growing at 18.41% annually, is evolving rapidly. Regular performance reviews help you stay ahead of the curve.
- Segment your audience effectively: Advanced targeting strategies, like remarketing campaigns, can improve ad performance by up to 400%. Audience segmentation is a powerful tool to pair with conversion-focused bidding.
- Prioritise mobile optimisation: Ensure your campaigns deliver a smooth experience across all devices. Mobile users often make up a significant portion of your audience.
For businesses aiming to improve PPC performance, professional expertise can be a game-changer. The PPC Team offers tailored strategies, detailed reporting, and expert guidance to help you implement conversion rate-based bidding effectively, avoiding common pitfalls along the way.
FAQs
How can I make sure my conversion tracking is accurate before adjusting bids based on conversion rates?
To get accurate conversion tracking, start by properly setting up conversion actions in Google Ads or whichever platform you’re using. Tools like Google Tag Manager or the Global Site Tag can help you gather reliable data. Make sure to test your tags thoroughly to confirm everything is working as it should.
It’s also important to regularly review your tracking settings. If your website undergoes any changes, these could impact how conversions are tracked, so adjust your settings as necessary. Keeping your tracking accurate is key to making informed bid adjustments based on conversion performance.
What’s the difference between Enhanced CPC and Smart Bidding, and how do I decide which one to use?
Enhanced CPC (ECPC) is a semi-automated bidding strategy that tweaks your manual bids in real-time based on how likely a conversion is. This method offers greater control over individual keyword bids, making it a good choice if you prefer a hands-on approach and have enough conversion data to guide your decisions.
On the other hand, Smart Bidding relies on machine learning to automatically adjust bids during each auction, aiming to maximise conversions or conversion value. It’s particularly useful when you want to scale your campaigns and let automation take care of the detailed adjustments, especially if your conversion data is consistent and dependable.
Go for Enhanced CPC if you like having control and don’t mind managing bids manually. Smart Bidding is better suited for those looking to prioritise automation and efficiency, especially for larger campaigns or when focusing on goals like improving ROI.
How can I adjust my bidding strategy effectively during seasonal changes or periods of fluctuating conversion rates?
To fine-tune your bidding strategy during times of seasonal shifts or noticeable changes in conversion rates, seasonality adjustments in Smart Bidding can be a game-changer. These adjustments let you plan for and respond to temporary surges or drops in conversion rates, helping your bids stay in step with expected performance patterns.
You can also manually adjust your bids to match the rhythm of busy and quiet periods. For instance, increasing bids during holiday sales or other high-demand events can help you capture more traffic, while scaling back during slower times ensures you manage your ad spend effectively. By staying ahead of these fluctuations, you can remain competitive and capitalise on seasonal opportunities without overspending.
