Adwords ‘Enhanced CPC’ Split Test Results

After reading Mark Ballard’s post on the Rimm Kaufman blog about the possibilities with Google’s new “Enhanced CPC” feature I was intrigued.  Google claims that Enhanced CPC can be a nice bridge between manual bidding and full-blown Conversion Optimizer (a campaign setting that allows Google to show your ads when and where Google thinks you’re most likely to get a conversion).

Enhanced CPC doesn’t take into account the CPA or cost-per-conversion you’re looking to achieve like Conversion Optimizer does, rather it  automatically adjusts your Max CPC bid, auction-by-auction (+/- 30% of your Max CPC bid), depending on whether Google’s algorithm for Enhanced CPC thinks you’re most likely to get a conversion.

Free Bid Management?

At the end of the day, Enhanced CPC is supposed to lower your max bid when you’re least likely to get a conversion and jack it up when you’re most likely to convert, lowering your overall costs.  If it turns out that this system works, it makes automatic bid management with manual over rides for zero fees a reality.

To determine the likelihood that a particular auction will convert for you, Google looks at a number of factors:

These include the individual words that make up the user’s query; the user’s geographic location, web browser, and operating system; and even time of day when the user is performing a search.

As Mark rightly pointed out in his blog post, advertisers can’t typically tinker with the settings for a number of these factors like OS and web browser, though they do have control over time-of-day ad scheduling and geo-targeting.

Setting Up the Split Test & Results

I decided to run my own test with Enhanced CPC.   In order for the test to be largely accurate, I had to ensure the campaign I was testing it on had no changes in the last 30 days or so to get an accurate baseline on all of the campaign metrics and conversion rates.  Additionally, I needed to ensure I didn’t change anything but the bidding method (changing from manual bidding to Enhanced CPC) to eliminate other factors accounting for changes in campaign performance or metrics.

That said, here are the results after 6000 clicks on a year-old Search only campaign (no Search Partners) taken over several consecutive weekdays that was untouched in the preceding 30 days:

Avg CPC- Start: .18c      End: .19c

Avg Pos.- Start: 1.7        End : 1.8

Impression Share- Start: 62.84%    End: 62.66%

Cost per conversion- Start: $17.60    End: $27.41

Conversion Rate- Start: 1.01%    End: 0.69%

Conversion Counts (1 per click): Start: 43  End: 31

The test period using Enhanced CPC was measured against the same days of the week and number of days as the previous ‘control’ week (aka the “Start”).

In a Word: “Meh”

End result?  Costs and went up slightly, conversions tanked, ad position dropped and impressions didn’t budge.

The big metric to measure of course is ROI, and in this case ROI dropped like a rock.

The odd thing however is that given the above results, you’d expect to see the Avg CPC  drop overall, which didn’t happen.

For me the net-net is that it didn’t work as advertised.  I thought perhaps it needed more time to ‘calibrate’ for maximum efficiency, but according to a number of PPC experts I spoke with it doesn’t really require the same lead time as Conversion Optimizer does to optimize itself based on campaign data.

What do you think?  Just another “bell and whistle” from Google to make Adwords appear easier for the masses?   Another attempt by Google to compete with 3rd party bid management providers?  Leave a comment below!