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Intelligent rate-setting is another of the tools that uses the work of Google’s algorithms to get the best possible result from advertising efforts, taking into account the information and resources we provide as advertisers. By resources, I mean, for example, flexible Google Ads, through which we entrust the algorithms to choose the best combination of text and graphics and adapt the advertising creation to the recipient depending on the context.
Through the use of automatic rate determination, we hand over to the algorithms the consideration of signals such as device type, location, audience group or time of day, as well as more advanced information that would be difficult to access on an ongoing basis – such as previously visited pages or the value of products viewed by the user. Dynamically modifying the rate for each auction allows you to make the most effective use of your budget and the most important business opportunities.
It is also worth remembering that differenttypes of Google Ads campaigns may have different setting options for rate setting strategies. For example,the Discovery campaign not only allows you to choose only maximize the number of conversions, but also expects the advertiser to choose one conversion category, such as Purchase. Within a category, of course, we can have several different events, but we can no longer then optimize simultaneously under Contact and Customer Acquisition. How we assign conversions to each category is of particular importance in this case.
Whilesearch engine campaigns, standardproduct campaigns andadvertising network campaigns allow us to choose a rate-setting strategy not based on conversions, the Performance Max andYoutube ad campaign for Action, already require us to choose between optimizing for value or quantity of conversions.
So let’s take a closer look at the two basic strategies aimed at gaining conversions.
Maximize number of conversions – for whom
With this rate-setting strategy, Google will control impressions in such a way as to get the highest possible number of conversions within the daily budget set by the advertiser. This is actually a solution for any business that measures selected events as conversions, but it does not take value into account – if they are important to us, this is not the strategy for us.
This gives a lot of opportunities to optimize for any event. Therefore, before deciding to maximize the number of conversions, I recommend checking the conversion settings in the advertising account. Exactly what events measured in the Google Ads account we consider as optimization goals will influence what our campaigns will aim for.
If we are in the default view of the Conversions screen, we can manage entire categories and events within them there. On the other hand, as we go to the older view, through the link “View all conversion actions”, in a clear table we can check all the conversion settings, including the length of the conversion window andattribution model
What’s more, if our marketing strategy is more complex, we’re targeting different segments of the campaign to different landing pages, or we simply want to allocate a specific portion of the budget to acquire one type of conversion and a portion to another, we can still modify these optimization goals at the campaign level.
Maximize conversion value – for whom
The most obvious application of this strategy is, of course, e-commerce campaigns, where different purchases can generate revenue of different values. For this reason, we want to more strongly reach those users whose purchases are for a larger amount – maximizing conversion value will enable us to do this.
Similarly, the situation will be similar for those businesses that admittedly do not sell strictly products (physical or digital), but services – especially if these services have different values, resulting, for example, from variable booking lengths.
If dealing with this type of business, it is crucial that when implementing analytics solutions, the value of the product or service is dynamically communicated at the time of payment – without the involvement of the site’s supervisors. If such a solution is not implemented, we are doomed to stay with maximizing the number of conversions.
What is important – if we also have activities without a specific value marked as conversions, the algorithms will still favor only those with a value – it is the conversion value for this strategy that is the most important metric.
Does this mean that if your conversions implicitly do not have quotas assigned to them, you do not have the opportunity to take advantage of value maximization? On the contrary. You can freely set the value of a given conversion already on the Google Ads side, even if the conversion happens to be imported from another source.
An excellent example is contact acquisition campaigns, where filling out a form with a customer’s data will be intrinsically worth more than a click on the phone from the contact footer. Admittedly, this requires an analysis of how much each type of user acquisition is worth, i.e., in this example, how many such phone clicks need to be generated to get a business value equal to the contact acquired by the form.
The baseline value is then of secondary importance – at a basic level, the algorithm will behave the same way – aiming for the highest possible conversion value, regardless of scale. However, if we know the hypothetical business value of such a user, it will then be easier to control whether we stick to an appropriate ROI.
The sub-maximizing value strategy can also be applied when we closely track the various stages of the process, such as account creation, registration, booking. If we assign the appropriate weight to each of these events in the form of value, here, too, the algorithms will “know” that the booking is the event with the highest value, and it will be profitable for them to get as many events as possible at the end of the funnel to maintain a high return on investment.
The strategy under value maximization can also be used when we are closely following the process.
To set your own conversion value, simply go to the Conversions section in Google Ads Tools and Account Settings, and then define the conversion values in the individual conversion settings. The default setting for conversions from Google Analytics is to automatically import the value along with the conversion – but in case we are not talking about sales and this value is not there, we can modify it manually.
If, however, the value of individual conversions is very close for us – giving them values and choosing to maximize the conversion value may be an unnecessary effort – in this situation it will be more appropriate to stay with maximizing the quantity.
When the campaigns in the maximization strategy gain enough historical data, and we will want to improve the result – it is worth imposing a target value on the already existing rate setting strategy. When maximizing the number of conversions, the target value will be the conversion rate. On the other hand, when we talk about maximizing value – we can set ROI as the target value.
Over time, these values can be further modified – with regularity, so that Google’s algorithms have a chance to adapt to the new rate before we change it again. By entrusting this role to specialists fromdigital marketing agencies, campaigns further benefit from their wealth of experience and knowledge.
Opportunities and threats
Setting up a strategy in an advertising campaign, the main axis of which is to use the advertising budget while aiming to gain as many conversions or their value as possible, we must be ready for a significant increase in spending.
The initial period of testing the new strategy requires monitoring the effect, among other things, controlling how the cost-per-click behaves – it can be expected that Google, in an attempt to boost the positions of the most effective phrases, will at the same time elevator their rates upward, especially when the budget is set by a large margin and can only be fully realized in this way.
This also works the other way, however – if our budget is severely limited, resulting in a lack of space for target CPA strategies to work effectively, then getting as many or as high a conversion value as possible within that budget we have can yield truly outstanding results.
There are, however, campaigns for which it will be more appropriate to choose a strategy under maximizing clicks or target display share. Maximizing clicks allows you to get as much traffic as possible for a campaign that converts less, or its goal is to build reach and/or brand recognition, for example, but is also quite scalable. By scalability, I mean being able to increase and decrease your budget depending on your strategy over a period of time, which, using click maximization, allows you to get the best possible result for that budget you have.
Targeting display share for this will work better for those search engine campaigns that have limited potential. By imposing a target in the form of a specific value of display share at the position of our choice (i.e. overall display share, display share at the top of the page or display share at the first position) and defining limits on the CPC rate, we protect the campaign from inflating the cost per click to very high values, as could happen with strategies under arbitrary maximization. An example of such a campaign is the Search Brand campaign, which we have already written about here.
Certified specialist with many years of experience, with Up&More since 2016. Her campaigns have been awarded many times in prestigious industry plebiscites. He has experience with clients from the development, automotive and mobile application industries.