Why Your Cost Per Click Increases with Max Conversions: Understanding the Reasons and Solutions
Aug 05, 2024When considering a shift to a Max Conversions bidding strategy in Google Ads, many advertisers notice an uptick in their CPC (Cost Per Click). This phenomenon often sparks debates across LinkedIn and Reddit, with many wondering whether they should stick to their Max CPC campaigns or embrace Max Conversions.
What Happens When You Switch to Max Conversions?
Switching to Max Conversions means you're instructing Google to optimize your budget to secure the highest number of conversions or the greatest conversion value within your set budget. If you add a Target CPA (tCPA) or Target ROAS (tROAS), you're further specifying that you want to achieve the most conversions at a specific cost per acquisition or return on ad spend.
How Google Maximizes Conversions
Google employs several tactics to maximize your conversions:
- Account History Analysis: Google reviews your account's historical data to identify the highest converting search terms, audiences, demographics, devices, times of day, and days of the week.
- Budget Utilization: Although you enter your budget as a daily amount, Google views it as a monthly budget, multiplying your daily budget by 30.4. This monthly figure helps Google optimize your spending to achieve more conversions.
Why CPC Increases with Max Conversions
As Google hones in on these data points to target the best converting search terms made by the right audiences at the optimal times, it inherently leads to higher-quality traffic. Higher-quality traffic tends to be more expensive, resulting in increased CPC. However, this increase in CPC is offset by the greater number of conversions you're likely to achieve for the same budget.
The Irrelevance of CPC in a Max Conversions Strategy
One common concern I hear during coaching calls and live group sessions is the anxiety over rising CPCs after switching to Max Conversions. Yet, upon closer examination of the data, it's clear that although CPC has increased, clients are obtaining more conversions for their budget. This shift underscores the importance of focusing on conversion metrics rather than CPC.
The Right Way to Implement Max Conversions
Implementing a Max Conversions strategy correctly is crucial. This is a broad topic, and I recommend watching our video on When to Add a Maximize Conversions Bidding Strategy for an in-depth understanding.
Conclusion
Transitioning to Max Conversions means prioritizing conversions over CPC. While CPC might rise, the ultimate goal is to achieve more conversions within your budget. Understanding this shift and making the transition correctly can significantly enhance your campaign performance.
