Many of you have probably already heard Google’s announcement for a new ad targeting feature, announced last Wednesday, which automatically optimizes ads by conversion rate.  (Previously the only ad settings were ‘Rotate’, which showed all ads evenly no matter their performance, and ‘Optimize’, which favored ads with a higher click-through rate.)  Undoubtedly, this new feature will change the way we are able to test ads, however, there are a few things to think about before immediately switching your ad targeting settings to ‘Optimize by Conversions’.

As a recap, for those of you who may not have read the article about Google’s new ad setting which optimizes for conversions, the new ad setting favors the ad with the highest conversion rate when determining which ad to display.  Thus, the ad with the highest conversion rate in an ad group will show more often than others.  This is a handy feature, because, as Google noted in the blog, “..Some of you have told us that the ad with the highest click-through rate isn’t always the ad with the highest conversion rate and that you’d like to be able to optimize for conversions rather than clicks…”  I can wholeheartedly agree with this statement, because sometimes it seems as though the ads with a high click through rate generate the most traffic but not necessarily the best cost per lead, since the traffic may not always convert whereas better targeted ads have lower click-through rates but higher conversion rates.

Still, as I mentioned above, there are a few things to consider before switching your ads to the rotate setting.  Namely, you need to be sure that you have enough data for Google to make a decision; otherwise, Google will optimize your ads for clicks as opposed to conversions.  Beware of this, as you may think that you are optimizing for conversions when you really aren’t.  Also, when testing ads, you’ll want to be sure that your ads are displayed on the rotate setting.  Otherwise, any new ads that you upload will be at a disadvantage, as your account will already be favoring ads that Google has recognized as top converters.  Once you’ve let all ads run for awhile, then you can turn the conversion optimize setting on, in order to allow Google to decide which ad is the most likely to convert.

In Summary:

  • You have to have conversion history accumulated, otherwise Google will optimize for click-through rate.  The Adwords blog does not say how much history you must have accrued before the optimize for conversions setting will work but the conversion optimizer bid tool requires 15 per month.
  • Better conversion rates don’t always mean more conversions; check out this post about the new conversion setting by ChannelAdvisor.
  • Each time you write new ads, you’ll want to switch it back to rotate in order to ensure that all ads receive equal exposure.

I am undecided as to whether this feature is really all that helpful, since you have to turn it off when you upload new ads and then turn it back on once you have data (at that point, you could look at the data yourself and pause ads if needed) but it is probably worth testing.  Maybe it will be a good thing, and it could help out for those businesses that don’t have time to manage their accounts although it may not be the best thing and should definitely be monitored during the testing stages.  If you do decide to test the new settings, be sure to keep careful record of ad group performance before initiating the setting; take note of things that you cannot look up at a later time, such as quality score.  Also, be aware of any other changes that you made while the conversion optimize setting is on, such as bid changes, that might be accountable for performance changes.

To change your ad rotation settings, go to the settings tab, and then scroll down to the advanced settings.  Click the ‘Ad Delivery; Ad Rotation, frequency capping’ link and it will expand to reveal a box with radio buttons.  Once you make your selection, it will be applied to all ads, on all networks and devices, in the selected campaign.