The Hot and Cold of Google Display “Pay for Conversions”

Pay For Conversions is a product of our addiction to performance marketing.

Pay For Conversions is a product of our addiction to performance marketing. Google has struggled for years to get us to use their Display Network, they’ve even attempted to force you onto showing to Mobile Apps. Their latest release single is called “Pay For Conversions”.

Who’s the inspiration for this new hit? Addicted performance marketers who do not see the value of advertising in Google’s Display Network.

Let’s quickly describe Pay for Conversion:

It allows advertisers to leverage the reach of Google’s Display Network in combination with Google Smart Bidding algorithm towards a Target CPA and the advertiser only pays if they get their desired result. In lament’s term, Google will pay for the advertising upfront and you will only have to pay if you get a lead/sale. Pretty good deal right?

So why do we say it’s Hot and Cold? Well, everyone has different experiences but most have seen Display + Pay For Conversions work for a week, a day then go completely cold. Google won’t share an answer that you don’t like but we’re going to share with you what they cannot.

Let’s play a game of Hot and Cold.

If you take a look into the below example, can you guess which campaigns are about to go cold?

hot & cold pay for conversion-1

What did you place your bet on? Let’s eliminate the easy ones, Google is happy to pay for your cost upfront, as long as it delivers. So you can already rule out the ones that haven’t generated a Conversion.

Out of the ones that have, which would you place your bets on? Well… $0.01 a click doesn’t sound very profitable. $0.05 per click doesn’t sound very profitable either, with basic maths, that equals to $1.21 CPM. That doesn’t sound profitable either.

hot & cold pay for conversion-2

Verdict? They all went Cold. Google gave the first two a bit more of a chance but they eventually went cold also. What’s our Google reps feedback on this? You need to raise up your CPA.

1 week later. Still 0 impressions.

Raised the CPA to 3x the original amount. It triggers again then goes cold again!

On the other hand, did you notice the high CTR’s? Google leverages it’s unlimited mobile app inventory and takes a dropshipping approach to our ads. Throw it at a bunch of users on unoccupied inventory and hope someone bites. Better something than nothing. Although your CPC’s might be low, Google’s margins on the CPM for App inventory are INSANE! You could be paying as high as a $110 CPM on a placement because of CPC bidding. Why? Because people misclicks on Mobile Inventory are extremely high and advertisers experience bounce rates as high as 96%.

Conspiracy Theory Alert

It’s to our belief that Google has an algorithm that calculates your overall investment and decides on when it’s recouped its upfront investment before allowing for your “Pay For Conversions” to work again. Because it makes no sense that increasing the target CPA by 3-4x doesn’t make it work. This is something we’ve seen across dozens of Google Ads accounts. Once again, it’s our theory and Google never stated such a thing and we could be completely wrong. Either way, it remains a mystery and no one at Google knows why.

Hate it or love it.

Google’s best practices state to begin with a generous CPA and a budget that is 20x. They say this casually but if your CPA is $100, there’s no way you’re sleeping well at night knowing that you have a $2,000 daily budget. But when you think about it, those guidelines actually do make a lot of sense. Your current CPC budget for your Search campaign budgets for at least 20 clicks right?

We know you’re going to be trigger-shy so we’re not going to leave you hanging. If you’re budget-constrained and/or do not have the Conversion Volume to do something like what Google had suggested, you can drive “Engagement” or a “Micro-Conversion” as your key metric.

Here’s our tips on Pay for Conversions:

  1. Set up the following Goals in Google Analytics to import into Google Ads:
    • Time on site > 60 Seconds
    • Pages visited > 2
    • Any other micro-conversion that would occur before a sale/lead eg. Add-to-cart, Downloaded PDF.
  2. In Google Ads, set the “Include in Conversion Column” to “No”
  3. Under the Conversion Actions Tab
    • Create new Conversion Action set
    • Select the actions we just created
  4. Create a Smart/Regular Display Campaign
    • Select Conversion Action to be the set you just created
    • Set a conservative CPA that is 2-3x your current Search CPC (Average bounce rate is 50-60%)
    • Set your daily budget to 20x this CPA

Think about it. When it comes to Search, you are driving users that are already in-market. With Display and by using the method we’ve shown you, you’re reaching someone who was not actively interested in your brand to then be very well versed in what you have to offer.

By using this method, you’re feeding the Google algorithm with 20x more data points to be far more optimized and this method may actually drive an Engaged user at a lower cost than Search as you lower the CPA over time. Just make sure you only make changes after the first 2 weeks and don’t make your change too significant, try to aim for 10-20% impact per fortnight. $3 CPA to $2.80 CPA to $2.60 CPA etc…

Final important note: BOT TRAFFIC❗️

Google’s pay for conversions attracts a lot of BOT TRAFFIC. If you’re using this for Lead Generation, make sure you have a reCaptcha on site. VERY VERY IMPORTANT.

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