#enhanced cpc adwords

Enhanced CPC: What is It and How to Use It?

Eugene Koplyk 06/10/2021 7 min read

Contents:

  1. What is Enhanced CPC? 
  2. Factors affecting Enhanced CPC
  3. The difference between conversions and conversion value
  4. ECPC vs other strategies 
  5. Why do you have to choose ECPC? 
enhanced ads

Like any other business owner, you are thinking about growing your conversions all the time. And your PPC Google Ads strategy plays a key role in how exactly you are going to perform. One of your main tasks is choosing the most effective one without squandering all your budget. But as Google suggests so many options, how to understand which one is the best for your type of company? 

Moreover, if you are already running some advertising campaigns, and you’ve been quite strong-willed in your manual CPC, as you are not really in, giving much control to Google, or on the contrary, want to receive as many clicks and conversions, and use “maximize clicks” strategy. This article is definitely for you. Enhanced CPC AdWords is a “ something for everybody” approach, so let’s find out what is all the buzz about. 

What is Enhanced CPC? 

Enhanced CPC Google Adwords is based on cost-per-click, which means that it takes a maximum CPC, which was already set by your before, and relying on the likelihood of sale after the click, can enhance the bid or reduce it. So, the trick of the strategy is in its semi-automation. You give power of decision-making to Google, but still, it is you who settles the price. 

enhanced cpc

Thus, Google’s algorithms use the entire database available to them to decide and calculate the probability of the purchase. It becomes the very solution you need because it partly removes the responsibility of constant monitoring from you, giving you much more time for other tasks. 

Factors affecting Enhanced CPC

To understand the whole process of working, you should be aware of some points, based on which Google concludes the advisability of raising the bid. 

So, for example, among the most influential are:

  • Gadget, which you are using
  • Location, at the moment 
  • Day of the week
  • Hour of day 
  • Age
  • Audience
  • Web behavior and previous purchases 

Basically, Google analyses all the data about you, your preferences, sales, and some external factors. Thus, relying on all of them allows you to compete with other ads and make more purchases. At the same time, it doesn’t mean that Google can put any price, as they can escalate or downgrade it maximum by 30%, from your original CPC. Yes, that also means that sometimes the bid can be reduced to 0$ if algorithms believe that conversion won’t pass for you. 

Keep in mind that ECPC probably won’t work if you don’t have any previous conversions from your side, too. Typically, they recommend having at least 20, to start interacting with algorithms. In other cases, it will be complicated for Google to understand what’s suitable for your campaign. 

Also, there is a simple way to avoid surprises when it comes to CPC increase. You just need to calculate the ROI (return on investment). To be in profit, ensure that your general cost of a campaign isn’t bigger than the evaluability of conversions. Knowing an exact campaign value will assist you in identifying the efficacy of the strategy. Nevertheless, it is better to keep an eye on the general results, to have a clear picture of your performance.

return on investment formula

The difference between conversions and conversion value

Conversion value is a relatively brand new feature, which Google set to identify an actual value of a conversion. So, it’s something like “digging a bit deeper”, and at the place of just a general look on conversions, they offer you to work only with conversions that are really worth it. 

This way, Google takes a closer inspection and evaluates the product that is promoted. Here, we can’t guarantee you one hundred percent that it will work out for you, but that attribute is definitely worth trying. Somebody says that they don’t see any difference, but it can be quite individual like with any other strategy. What doesn’t shoot for others can shoot for you.

Also, this feature is available exactly with CPC enhanced, so it is another reason to try it out. 

ECPC vs other strategies 

Now, we will attempt to answer the biggest question, why you have to choose ECPC and why we think it is one of the best strategies to implement. There are many CPC models, which are performing greatly that Google Ads can offer you. We would like to discuss the most popular: Manual CPC and Maximise Clicks strategies. We will try to compare them and talk over the pros and cons. 

We will begin from the classical one - Manual CPC. “Why this one?” - you will ask. Manual CPC is all about full control. Users like it, precisely because it is predictable. Using this option minimizes the risks of wasting money, which is quite an attractive choice, especially for those who do not have a large budget. The principle is that you define the maximum cost-per-click, and Google always stays within the selected price. So, no matter how you perform, you will remain in the same bid. 

Of course, there are corresponding issues that appear. For instance, you have to survey your ads and bid all the time, as it is you who builds the logic and modify the price when necessary. This is the main disadvantage of manual control since you spend too much time on observation. 

Immediately, we will take the completely opposite solution - Maximize Clicks bidding. This option assumes almost complete trust to Google, as it is it, who decides what CPC gives preference to. This is a fully automated strategy, and most people pick it due to it taking a shortcut. As it is logically understandable, the aim here is to get as many clicks as possible, and Google automatically sets the bid, but still within your budget. So, essentially, Maximize Clicks is for those who rely on Google or just want more help from it. 

As you can see, both strategies can be effective in their own way. Still, they are very contrary, so the logical decision from Google was to create something that can satisfy both criteria. Adwords enhanced CPC is between the two. Compared to Manual CPC, it gives some more liberty to the Google algorithms, which will up and raise the bid, depending on the value it can bring to you, but it is you who set the price. And in  Maximize Clicks case, ECPC allows you not to get carried away and leaves you some manual control over the campaign. 

Why do you have to choose ECPC?

risk

If you are still not convinced about the expediency of the ECPC approach, let’s finally expand all the advantages and disadvantages of it. 

Pros:

  • Ability to join forces of  manual and automated strategies, which takes the best of both
  • Google algorithms will choose only the quality conversions, which means more chances for 100% purchases 
  • You will have much more time compared to other manual strategies, as there is no need in monitoring around the clock
  • If Google finds the conversion not valuable enough, you will spend a lot less, or anything 

Cons:

  • You give the control to Google, which means it does all the decision-making process
  • A lot depends on your previous conversions. If you will establish them incorrectly or don’t have enough of them, it can affect your performance badly
  • Be prepared that your average CPC can be surpassed frequently 
  • If you are a fan of complete automation, here, you still have to manage the bid, sometimes 

Conclusions

Enhanced Cost Per Click is a great alternative to many of the already existing bid strategies. 

With the progress of technologies, the base and resources of Google Ads grow, thus relying on it can bring you a real breakthrough in your sales. Don’t forget that this approach will work for you only if you are not new to the market and have some experience. If it is your situation, ECPC can be a strong stimulus for transition to another level. At the same time, at the end of the day, only you know better which strategy is the best, but to find this out, you have to experiment and attempt it, and Wiserbrand can be your personal assistant on this road.