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How Does Enhanced CPC Bidding Work in AdWords? [Review]

White Shark Media

12 years ago



Enhanced CPC Bidding is a very useful Google AdWord’s feature. Ironically, many people do not use the feature, as it’s not fully
understood and may cause some initial confusion.

When you create new campaigns, you’ve probably seen this “mysterious” Enhanced CPC Bidding option. If you ever wondered what it’s for and how it works, today is a good day to become a regular Sherlock Holmes and solve the mystery once and for all!

Once you know how Enhanced CPC Bidding really works and what its advantages are, you will comprehend the benefits and fully understand how it can help you improve the performance of your AdWords campaigns.


What is Enhanced CPC and How can it Help AdWords Advertisers?

Enhanced CPC Bidding is a feature that looks for ad auctions (or keywords) that are more likely to generate conversions. For keywords with a higher likelihood of converting, the Enhanced CPC Bidding feature will accordingly raise max CPC bids up to 30 percent.

This enables you to automatically become more competitive when it comes to winning the auction.

On the other hand, when the Enhanced CPC Bidding feature recognizes auctions that don’t look promising, it decreases your bid.

But in contrast to when the Enhanced CPC tool increases your bid, then the potential bid decrease has no limit.

How does Enhanced CPC Bidding Work?

Google AdWords looks for patterns of clicks and conversions and compares them to your past results. If certain search or keyword combinations generate more conversions, it will identify these and modify your bids in order to get you more exposure and improve your positioning when those keyword combinations are identified.

That’s why, to use Enhanced CPC, having conversion tracking is a must simply because that’s where the data originates from.

Can I Trust Enhanced CPC to do my Bidding for Me?

As with most features in AdWords, there are factors that you need to weigh in when determining if Enhanced CPC Bidding is right for you.

In theory, enabling Enhanced CPC bidding should either only have positive effects throughout the campaigns or a neutral effect.

It should work this way because it leaves part of your traffic working independently with your regular max CPC bids (When the feature is enabled it does not affect the entire campaign to keep it from a hypothetical negative turnaround), it then compares the two sets of results and adjusts accordingly, allowing the better performing bids to keep on doing their job.

How Enhanced CPC Bidding Can Affect your AdWords Campaign Negatively

Enhanced CPC Bidding can affect you negatively when you do not register enough conversions in the campaigns historical data.

In contrast with its sibling feature (the Conversion Optimizer), it’s not targeting a specific cost-per-acquisition (CPA) and could therefore definitely cause a spike in your costs-per-conversion, in effect exceeding your CPA goal.

Another way in which it could affect you negatively, is because there’s no limit to how much the Enhanced CPC Bidding will decrease your bids. This could in return result in certain keywords not having the adequate exposure because the feature could be lowering the CPCs on important keywords way too much and cause you to miss out on quality prospects or potential sales.

All in all, I would suggest you to try it out. Just be careful and execute smartly (when you have the right circumstances such as an adequate CPA and enough conversions in the campaign’s historical data). In such a case, it will most likely serve its purpose and boost your campaign’s performance in a positive way.