We’re excited to announce the launch of Enhanced CPC, a new automated bidding feature that can help you improve your ROI on your campaigns with manual bidding. Enhanced CPC uses your campaign’s historical conversion tracking data to automatically adjust your Max CPC bid based on the likelihood that your ad will convert. As a result, you should receive more conversions while maintaining or reducing your overall CPA and hopefully spend less time managing your Max CPC bids.

How does it work?

Let’s walk through an example. Jeff sells model airplane kits and has enabled Enhanced CPC for a campaign that contains the following keywords, each with a Max CPC bid set to $0.30: model airplane, model airplane kits, and build model airplanes. When a user searches for ‘model airplane kits,’ the AdWords system recognizes that this term has converted well for Jeff in the past, and therefore increases the Max CPC bid to $0.32 for this specific auction. If the likelihood of a conversion is very high, Enhanced CPC can bid up to 30% above the Max CPC. This means that the most that Jeff will be charged for a click is $0.39.

On the other hand, when a user searches on a term that has not converted well in the past, e.g. ‘model airplane,’ the AdWords system will lower the Max CPC bid for this specific auction to $0.20. By adjusting bids based on Jeff’s conversion data, the AdWords system ultimately helps him increase sales while maintaining or decreasing his average cost per conversion.

Article for Google’s official blog.

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