Does The Maximize Conversions Strategy in Adwords Perform Well?
A Closer look at Maximize Conversions bid strategy
In case you have been under a rock or, like me, have been wrapped up in the Philadelphia Eagles World Championship Football season, the ad grant apocalypse may have happened.
With grant accounts, monthly budget limits only exist in theory since the ad spend isn’t coming out of your client’s pocket. You’re also limited to bidding $2, so more often than not, you can’t come close to spending your $10,000/month grant.
That situation could lead to a “set it and forget it” approach to campaign management; but in the middle of December 2017, Google Grants’ advertisers began receiving emails stating that AdWords would be lifting the $2 bid cap on keywords when campaigns use the Maximize Conversions bidding strategy.
My client who runs a local charity forwarded me the AdWords email notification and said, “Assuming this is legit, what does it mean? Sounds like good news?”
My first response was an enthusiastic one, as no longer being limited to $2 bids was, in fact, good news! After reading deeper into the new regulations for Ad Grants, though, I thought twice. The core changes are outlined in this clix marketing article, which first reported the “not so good news.”
Two major changes:
- AdWords increased the account CTR required to stay active from 1% to 5%
- Branded keywords you do not own will no longer be allowed.
Luckily, my client’s account did not require many major changes, as the structure of my campaigns was sound. Other than pausing a few very low traffic keywords with a poor CTR, everything else was in good shape. I cleaned up the account and then switched the bid strategy over to maximize conversions on Jan 12, 2018 in order to exceed the $2 max bid.
The below chart details my client’s data comparing 1 month before the switch to maximize conversions (12/11/17 – 1/11/18) and a month after the switch (1/12/18 – 2/12/18):
I was also shocked that my average position did not move much at all, only 0.4 higher than the month prior. The bidding strategy was using so much extra spend for very minimal improvement at all.The clicks and impressions in the campaign increased significantly. This is not surprising since we were no longer capped at the $2 bid. However, after seeing my average cost per click, cost and conversion rate take on massive negative changes, I had some concerns.
I had to go to the keyword level to really see where the extra costs were coming from.
Above are some of the largest non-branded CPC changes I saw after the switch to maximize conversions. All these keywords had at least 1 click prior to changing the bidding strategy. The conversion strategy caused a huge increase in CPC. I didn’t see a significant change in the traffic from most of these keywords, yet I was paying 60 to 80 times more for that same amount of traffic.
The one keyword in the list, “charity organizations that pick up furniture” went from 16 clicks to 88 clicks after the bidding strategy switch. This was a very nice increase in clicks and conversions for this keyword. Conversions went from 1 to 9 but, the cost per conversion went from $18 to $304 per conversion after the switch. Worth it? For a grant account, maybe. For a normal account that would be using this strategy? Absolutely not.
Let’s examine some of the CPCs on keywords that had not received any clicks before the switch to maximize conversions:
Other than one BMM keyword (+volunteering +job), these are all broad match keywords. These costs per click are outrageously high. I was receiving impressions at position 2.7 when the “volunteering work for students” bid was capped at $2. Why would AdWords increase the bid so much?
Search Query Report
Focusing on the top keyword and search term “how to donate furniture near me” the keyword triggered “sofa donation.” This is the wrong keyword that should have been triggered. I have much more relevant keywords in the campaign but, this is the chance you take with broad match.
Despite triggering the wrong keyword, the search term is still relevant; it’s exactly the type of user I want to come to the website. I can also see why AdWords deems this a web user that is likely to convert, and maximize conversions did its thing to bump the bid. But $179 for the click? Why so high?
The suggested cost per click for the keyword sofa donation is $2.46.
The suggested bid for “donate furniture near me” is $2.35.
So again: $179 for a click? Why?
How Maximize Conversions Works (snippet from AdWords Support)
Going deeper into the last bullet point. At the time of this $179 click, I was spending $350 a day on the campaign. The click in question happened on Jan 26, 2018.
Here is the cost total for that day at $329.79
Here is also every keyword, search term and CPC from that same day:
The click still seems to be a huge outlier on the day. Is it possible that this was the last click of the day and maximize conversions just bid up as high as possible to reach my daily budget? Looking at the Dimensions report, I can see that this click was one of the 3 clicks that happened during the 9 am hour of that day. This was the only hour of the day that went over $100 in spend.
Is it possible maximize conversions is a front-loaded bidding strategy where it will max out at the start of the day? Looking at the cost per hour, there might be some truth to this theory, but it is common to spend most of your daily budget during working hours. I do not see anything telling from the hour of day data during the period that maximize conversions was being used.
I still have no idea why some of my clicks are so expensive. If the bidding strategy was working correctly, the click for “sofa donation” should have been $5 to $10.
What Does Google Have to Say?
I reached out to Google to see if I could get some more insight. Here’s what Google rep Alexa had to say:
“Maximize conversions depends on historical data within the account. The reason why the bids in this grant account are so high is because the ads grant team is trying to gain some insight on who is more likely to convert. Therefore, the bids are super high to gain data on the users that will convert and with more history on who will convert means a better quality ad.”
So maybe this an initial spike in costs and will level out over time. We’ll see.
What We Learned
The one significant factor that does have a major effect on maximize conversions is daily budget. If you keep your daily budget to exactly what you want to spend, maximize conversions will do its best to spend it, sometimes making your clicks crazy expensive in order to do so. I recommend testing a lower daily budget, as it personally drives me nuts to know I spent $179 on a click I could have probably paid $3 for in the same position. But again, it’s not my (or my client’s) money.
One thing is for sure, you can crunch data all you want, but I personally cannot seem to find an explanation as to why some CPCs are so high while using this bidding strategy. I’m not an expert in bidding strategies; I’m from the manual bidding school, as I really like to find the most cost-effective bid possible.
I would like to know the reason for some of these cost per click outliers. Until then, I’ll continue to battle the AdWords Grant Apocalypse. If you have some ancient wisdom of bidding strategies, let me know your thoughts on my data and let’s get the conversation going in the comments.