I’m honestly surprised there’s not more buzz and excitement about this. I didn’t even know about it until I read a post by Kris Jones, CEO of Pepperjam on the Pepperjam Blog. It turns out that Pepperjam was selected as a beta tester for this cool new tool. I immediately logged into my biggest Google Account and discovered that I was a beta tester too! 
I don’t know about you I’m super excited about this!?!
A lot of you are probably wondering, “What the hell is a Conversion Optimizer?”
Here’s how Google describes this tool:
“The Conversion Optimizer lets you specify a maximum cost-per-acquisition (CPA) bid for each ad group. Then, this feature continually adjusts your CPC bids to keep your conversion costs under your maximum CPA bid, showing your ads only when you’re likely to get conversions. By using the Conversion Optimizer, you can save time while minimizing your conversion costs.”
So what does that mean?
It means that Google will do all your bid optimization for you, you just set the maximum CPA, or cost per acquisition that you want. Your CPA is the same as your Cost per Conversion, which is basically how much it costs in adspend to generate ONE sale.
Example: if the commission of your affiliate offer is $20, and your CPA is $10, then it costs you $10 in click to make a $20 sale, your profit is $20-$10 = $10, and your ROI is $10/$10 = 100%.
So if you tell Google Conversion Optimizer to set your max CPA to $10 it will, over a period of time, adjust your bids so your CPA for each adgroup is ALWAYS at or below $10.
Well, theoretically anyway.
I heard horror stories from other affiliates about the Budget Optimizer, so I’ve decided to wait until this tool is out of beta before I try it out.
If this tool does what it says it does that it going to save me, and many other ppc guys who manage large campaigns, A TON OF TIME!
I have over 27 active campaigns, if I were to spend even once a month optimizing each campaign it would be a huge time sucker. Don’t worry, I don’t! But my ROI suffers as a result.
I’m in the process of launching a whole bunch of new campaigns. Which is exciting, but I started getting worried that all these campaigns are gonna suck up ALL my time.
I was even considering spending $3000 a month on a professional bid management tool, but Google now offers the Conversion Optimizer that will optimize your bids FOR FREE!
Long Live the Super Affiliate Lifestyle !
Great post. How often do you think an affiliate should optimize their campaigns? If you do it too often, you’re not basing your optimization on enough data, but if you don’t do it often enough, you leave profits on the table (and maybe never even get your campaigns to the point of being profitable!). What are your thoughts on that?
The only problem is that Google is collecting all of this data for themselves. If you sit down and think about how much they know, and will know, about your affiliate business it’s pretty scary isn’t it? It’s not going to happen overnight but a few years down the line Google could just shut down the AdWords program and run all their own ads. They know your keywords, ads, conversion rates, EPCs, CPMs, how much you make per sale, how much a sale is worth, etc. They have or will have every single piece of information they would need to become the ultimate super affiliate, if they wanted to.
Amit,
Google says you will lose your position preference with this feature. Seems like it would be tricky to stay away from the first three positions on the first page. I can just imagine all the ebooks being created right now on this new feature.
Patrick
Google is already the ultimate super affiliate since its earns money from everyone.
Amit,
How long does it usually take you on average to get a new campaign optimized to your target ROI?
I’m going to recommend affiliates’ wait this out too. Couple issues:
1. If for some reason Google conversion tracking pixels stop firing on a thank you page, conversion optimizer will think you’re not making sales and crank your bids down to nothing to compensate, even though sales/actions are still coming in.
2. Google conversion tracking is notoriously off by up to 25% +/- in many cases, which means conversion optimizer will be off by that much as well.
3. What about adgroups that currently give you a super-low cost per conversion? If you set your CPA to that low level will Google ensure you keep it? What happens when everyone sets unrealistically low min CPAs for their adgroups? Google can’t control consumer behavior 100%.
Google is an automation company at the heart, and these new features are designed to push the envelope of algorithmic optimization, and I’m predicting the results will be mixed at best.
Hi Kyle,
To reach your target ROI can take several weeks or even months, depending on various factors: how well your campaign starts off (you may need to revamp your landing page), how much traffic your getting so you have statistically relevant data before you adjust your bids.
Hi Geordie,
Great points! When I was playing around with this feature what really disturbed me is that Google doesn’t display it’s algo for adjusting your bids. There’s not telling what might happen!
I have friends who had a lot of success using a bid management tool. However, this tool allows you to set the rules on how to adjust the bids.
He who has the data wins. I am okay with budget optimization, but a little less comfortable letting them all the way back into my actual conversion. Call me paranoid, but this is something I would rather not expose in all cases.
Any 3rd party tools out their that can do this though the google API? That I would definitely be interested in!