Bonus Episode | February 26, 2019

Deep Dive: Pay for Conversions in Google Ads

Read the full Deep Dive article here.

Show Notes:

Who?

  • PFC is for the Google Ads advertiser that cares about performance and is using display campaigns.

What?

  • Pay for conversions (PFC) is a bidding type that allows you to only pay when someone performs a desired action (a.k.a. you only pay when a conversion takes place).

Where?

  • The answer is simple. Google Ads. Okay, that answer is obvious but where would PFC actually be useful? Right now, you can only use PFC in display campaigns with target CPA.
  • You can’t optimize for off-line conversion tracking or for imported conversions (even when those imported conversions come from Google Analytics). It has to be a website conversion tag from Google Ads for PFC bidding to work.

When?

  • First, your account has to have more than 100 conversions (account wide) in the last 30 days.
  • Second, 90% of those conversions had to occur 7 days after the ad click.
  • If you don’t meet those requirements, Google also offers PFC in smart display campaigns. To use PFC in smart display campaigns you only need 5 conversions in the past 30 days.

*we don’t recommend using smart display campaigns.

Why?

  • Because it’s awesome. For performance marketers, conversions are the driving force of results and now Google is allowing you to only pay when you get that desired action.
  • You can test PFC as much as you want and still not spend a single penny on it if it doesn’t work.

Wow! How would you use this?

  • Besides all of the ways we recently covered, you can also run testing and experiments with PFC.
  • But let it be known that you can’t create an experiment that tests a PFC campaign against an existing PPC campaign.
  • When you first begin testing, we recommend giving Google an ample budget so it has more room to learn.
  • Lastly, whenever you clone a PFC campaign it will switch to PPC bidding by default.

Reality check.

We love that Google Ads advertisers now have the option to only pay for conversions. Yet in reality, we haven’t seen any major results with PFC bidding. However, this bidding type is still fairly new so be sure to try a few different approaches to see if anything catches. Plus, Google usually needs time to work out all the kinks to get it just right.

Read The Full Deep Dive:

Greg: [00:00:00] Hi I’m Greg Finn.

Jess: [00:00:01] And I’m Jess Budde.

Greg: [00:00:01] Welcome to Marketing O’Clock’s ripped from the headlines.

Jess: [00:00:05] A deep dive into what’s going on in digital marketing right now.

Greg: [00:00:29] Today’s topic is from our episode number forty nine, “Google ads pay for conversions.” That was back at the end of December but we have some information now so it’s time to do a deep dive with facts.

Jess: [00:00:46] With facts. So back in December Google Ads announced PFC or pay for conversions. And now that it’s been officially rolled out for a while we’ve started playing around with it a bit. Around here.

Greg: [00:00:59] Yes. And A quick explainer behind pay for conversions. It’s exactly what you think it is. Traditionally you’ve been able to pay for impressions or vehicle impressions or clicks. And so what this does it adds another wrinkle into the fact that you will not be charged for an impression. You will not be charged for a click. You’ll only be charged when that conversion happens.

Jess: [00:01:25] Pew! Brain explode.

Greg: [00:01:27] So to explain what this would be like and why Jess’s brain just exploded there. It’s like buying a pack of baseball cards. But only paying when you get the card you want. Like that’s the best analogy I could think of that. You’re not paying for the pack. You’re probably going to pay a little bit more for that card but you’re getting what you want. And that’s why it’s super cool.

Jess: [00:01:53] I love it so much. And when you first started up it’s kind of wild right.

Greg: [00:01:57] It’s kind of you feel a little dirty. That’s what I thought. It’s crazy.

Jess: [00:02:03] Like you’re getting away with something. Right?

Greg: [00:02:04] Yes. Because you’re getting impressions and you’re getting clicks for free for free. Zero dollars.

Jess: [00:02:10] Yeah and this is not. It feels so wrong and it’s super foreign but yeah. Zero dollars and yet you still have like data on your graph. It’s wild.

Greg: [00:02:18] I know. It’s nuts. And it like melts your mind. And typically you look for things where you know there’s an error and it looks like there’s an error but it’s on advertiser’s behalf for the first time ever. So it’s it’s it just never happens like this. OK. But it’s a real thing currently until it gets taken away from us at some point.

Jess: [00:02:40] I hope never.

Greg: [00:02:42] But let’s talk about the who what where when and why of it.

Jess: [00:02:47] And you forgot how.

Greg: [00:02:50] I see I know that that’s technically like one of the W’s. And one of the five or six I don’t know.

Jess: [00:02:55] I mean it’s an H but there’s a W in it.

Greg: [00:02:57] But that’s always been a cop out to me like maybe you rename the word or you just don’t count that as part of it. You come up with a different word or something.

Jess: [00:03:04] Rename the word to it. Wow?

Greg: [00:03:06] There you go.

Jess: [00:03:07] Not the how but the wow.

Greg: [00:03:08] I like that. That’s from here on moving forward it’s gonna be the wow.

Jess: [00:03:14] I love it.

Greg: [00:03:15] OK. So. The who behind pay for conversions is pretty simple. If you’re a Google Ads advertiser that’s using display campaigns. This could be for you. Furthermore. If your goal is impressions or clicks, This isn’t for you. This is only for the real performance marketers that are looking for conversions and we’re gonna get to it a little later. You’ve got to have a few more I want to get into the I don’t even know this. This is the problem with the W’s. The how the when the what. But there are some limitations on there. But again if you are a Google ads a user and you care about performance and conversions. This is for you,

Jess: [00:04:04] Totes. So we have the who. Let’s do the what. What is pay for conversions. So to be technical it is a new bidding focus that allows you to pay only when someone performs an action that you are looking for a.k.a. a conversion.

Greg: [00:04:17] Exactly.

Jess: [00:04:19] Furthermore it does have some stipulations with which Greg alluded to a moment ago. It only works with Target CPA and only on display campaigns. This is not for search.

Greg: [00:04:31] And target CPA is a bidding type in Google ads where you are trying to get to a specific cost per action or acquisition however you want to call it. So you need to be using that bidding type.

Jess: [00:04:44] Exactly. And there are two different ways that you can set it up depending on how you like to do things in Google ads. Greg and I differ a little bit here so we will run through both options so that you have it depending on what you like to do. First, the way I like to do it is selecting a bidding strategy manually. Google’s words not mine. The setup here is pretty straightforward. You go into your bidding settings in the campaign settings you choose target CPA again as your bidding type. You set your CPA and then underneath that there’s a little option for what you want to pay for. And you can select conversions so you do that. You hit save and boom you’re off.

Greg: [00:05:21] Yep. And that’s where you should see in the other things where you could pay for it. There could be impressions or viewable impressions and clicks.

Jess: [00:05:28] And you don’t want those.

Greg: [00:05:30] No. And so the way that I was rolling this out because it is a new feature I took all of our previous display campaigns for it for my clients and I clone them in what is still called Google Ad Words Editor. Even though it’s Google ads. And if you go to that Google AdWords Editor site it says Google Ads Editor where you download it and it’s not what it says it is deceiving. But anyway. So in Google Ads Editor a.k.a AdWords Editor you can. What I was doing is I taking those display campaigns and cloning them pausing them bringing them back into the web interface and then I would make that change there. And so when I clone those pay for click campaigns with traditional target CPA I could just go in and make sure that’s the way that it needed to be was that I wanted to focus on conversions which still should be there because their target CPA campaigns and then I could put the target CPA in and make sure that it is automatically maximized for conversions because it was a previous account and pay per clicks. So either way you can get to the same result.

Jess: [00:06:39] And with this setup the I guess they call it. They don’t call it this. Guidance mode it’s guidance getting a bidding strategy. It’s different here in that it’s optional to put in a CPA right. Which is not the case if you do it the old way the manual way.

Greg: [00:06:53] So it just seems strange because the way I did it I had to click on two to add more information to put the target CPA. But then what do you pay it’s pay for conversions. And we didn’t I haven’t run this so disclaimer. Oh yeah I got a conversion imma pay you for it.

Jess: [00:07:12] Here’s seven million dollars.

Greg: [00:07:15] I hope not.

Jess: [00:07:15] Yeah. That doesn’t make any sense but it does it says right on the screen optional when you look at it. So we’re not going to try it but if you try it let us know.

Greg: [00:07:23] All right. So there’s a few different ways to get there. What else do we need to know.

Jess: [00:07:28] So yeah either way that you set it up. The point is you have to choose pay for conversions because again in the settings by default I believe it says clicks but then there’s also that impressions option you want to make sure that you select conversions something else of note is that there is an upper limit on the target CPA and that’s two hundred dollars.

Greg: [00:07:47] Okay. And if you go over this you will get a warning message and you might be overcharged. So don’t do it. This isn’t for you. If you have some crazy. You have seven million dollar CPA they just talked about a not for you. And then one other thing that we’ll get into in a minute is that it doesn’t optimize for off line conversions. So anybody that is importing those conversions will get there in a minute but that is the what. So now on to the where. Answer? Google ads. But really where does this make sense. And I think that’s the critical part here. So if you have conversions that you’re tracking where would you actually use this. Right. So I just alluded to this but you can not do off line tracking in reality. That then that’s from that is rich from the Google blog post. You can’t use offline tracking but in reality it should really say not for import tracking. And when you set up a conversion in Google ads you have a few different options. You can do a Web site conversion an app conversion a phone call conversion or an imported conversion or import is what the tab is on there. And many people use import conversions and don’t really know it probably because if you import a conversion from Google Analytics it is called an imported conversion. It is definitely an online conversion but it is an important conversion. And I had problems with this with some clients because that wouldn’t work. They were not manually putting those in. They weren’t importing it from Salesforce or anything like that. They weren’t making a spreadsheet. It Was coming in from Google Analytics and we couldn’t run pay for conversions.

Jess: [00:09:40] Did you get a warning when you tried to do it. Did it. Did /google tell you?

Greg: [00:09:44] Yes I was losing my mind because it said you can’t do it with imported conversions and I didn’t know that this was an acount that we had inherited and that they had set it up with Google Analytics. So I kept trying to do like we’re not importing conversions. None of these conversions that I’m trying to optimize for are imported whatsoever. They’re automatic. And I’m reading this Google blog post and it says don’t use offline conversion tracking but in reality you can’t use it if you’re pulling in those conversions from analytics and it drove me bonkers. And I lost hours of my time. So that is what the deal is. It’s has to be an actual the it has to be the web site conversion tag from Google ads and then also finishing out this kind of where we would use this is that it’s not for search campaigns. It’s not for video campaigns. This at the moment is just for display campaigns only.

Jess: [00:10:46] Only at the moment. Hopefully that will change.

Greg: [00:10:48] Not always gonna be the case you never know. But right now that’s the only way you can get it.

Jess: [00:10:53] Awesome. Let’s go in to the win the next of the WS. When I guess when you meet certain conversion requirements is the big thing here. So this is not for the fair weathered converter somebody that’s just converting once in a while which hopefully isn’t the case if you know you’re doing your job but in reality your account has to have more than 100 hundred conversions in the last 30 days in order to set this up. Again not the campaign because you’re always setting up a new campaign this is account wide. You need to have 100 conversions and of those conversions. 90 percent of them have to occur within less than seven days after the ad click. So if your posts click conversion journey is typically longer than a week. You’re not going to be able to use this pay for conversion bidding.

Greg: [00:11:36] In one note, Jess you had mentioned that those conversions are not at a campaign level. It’s from an account level from what I’ve seen. You still. Can get this done with 100 conversions even from search campaigns. So it’s not like it has to be. Well I need 100 campaigns from display. It’s actually account level which is sort of strange but whatever.

Jess: [00:11:59] But it’s huge and helpful. Yeah absolutely.

Greg: [00:12:02] OK. So there is one caveat. If you’re trying to get up faster and let’s say that you’re using smart display campaigns. Well I don’t know if you know what a smart display campaign is we don’t use them here at Cyprus north but it’s when you allow Google to do automated bidding automated targeting an automated ad creation. Yes. And you give it up and trust the process that machine learning and A.I. gods there. So if you are using smart display campaigns, A, bless your soul and, B, you only need five conversions in the past 30 days according to Google. So that is I guess a nice little benefit for you poor fools that are using smart display campaigns. But you know.

Jess: [00:12:54] 5?

Greg: [00:12:54] 5. So goes from 100 to 5 in the last 30 days.

Greg: [00:13:00] That’s a big difference but I guess. Nope I’m not going to I’m not gonna say anything nasty about these campaigns.

Greg: [00:13:06] OK so that is when you can use it. And then one other thing just as a PSA. Just because with Smart Display campaigns and you set that up with the automated betting and targeting and ad creation you can do pay for conversions faster doesn’t mean you should do it. We’re not recommending that we’re not advocating for that. Make sure that whatever you’re doing is something that you’re proud of and I’ve just never been proud of those. Campaigns. That are auto-everything.

Jess: [00:13:36] Google’s proud of them.

Greg: [00:13:37] Yes. OK. And so that brings us really to the why W. So why would somebody use pay for conversions. And the answer is. It because it’s incredibly like it’s you’re actually paying when somebody performs an action that you like. And to me that is like the most powerful thing in the world. We talked about it our 2019 trends show and our our forecast for what we think might happen our predictions. But this is amazing technology and if Google can make this work and you can actually pay an acquisition and they get the dial in their machine learning and artificial intelligence, why wouldn’t you use pay for conversions.

Jess: [00:14:23] Only if you’re scared and you shouldn’t be because you’ve literally nothing to lose because you’re not spending any pennies not one.

Greg: [00:14:30] Yes. OK. In so. Really. Why to do it is because you’re paying for the action. That’s all you need to know. That’s the why that is the why.

Jess: [00:14:42] It’s really more of a why not. Right.

Greg: [00:14:43] You know what. I love that. Why not?

Jess: [00:14:46] Tell you what you’re not going to love the next W.

Greg: [00:14:52] Oh the next W. We have one more W left I didn’t know that.

Jess: [00:14:53] The how.

Greg: [00:14:54] Oh that’s an H. No no it’s a wow.

Jess: [00:14:59] It’s a wow. Yea. We’re moving on to the wow.

Greg: [00:15:02] I like that.

Jess: [00:15:03] How would you use this or how can you use this other than the obvious applications we’ve already talked about just a couple of other little things to note testing and experiments. So if this is something that you want to test just a reminder you can not fire up an experiment within an existing PPC campaign PPC meaning pay for click or pay per click excuse me testing that against a pay for conversions but what you can do is you can fire up a brand new you can clone that paper click version of the campaign you can fire it up as a pay for conversions and you can then run experiments with some of the other elements of the campaign again with the pay for conversion bidding.

Greg: [00:15:40] So you can run those experiments as long as is apples to apples as what you’re gearing toward. So if you’re going for a conversions then you can run the experiment. You can’t do it across different you know results you’re looking for.

Jess: [00:15:54] Exactly.

Greg: [00:15:55] OK cool. Another thing to note is that like everything else in Google ads the budget may go over your daily budget by up to two times and it will even everything out over that thirty point four divider that Google does. So again if it does take off a little bit and it stays like that for a while you will be re-compensated. If you don’t know what I’m talking about right now you can look at the daily budget rules for Google ads and every campaign go up to 2x the daily budget and then there’s some some mathematics that get you your money back and this will also be the same. So again check that out and don’t get too scared if you see it spending a little more than you had hoped.

Jess: [00:16:42] Yes. Never be scared. I mean be scared sometimes. Be scared if you’re not paying attention because if you have a PFC campaign that you have setup and you want to use it as the basis of another campaign that you’re spinning up. If you go into our dear friend AdWords Editor yep still AdWords Editor we’re going to harp on that until they fix it. It can be a bit dangerous. So if you are cloning out a campaign that you have. That was PFC and you push it live in AdWords Editor and you go into the online interface you will see that it has switched over to pay for clicks by default. So what the H Google. I’d love a heads up on that. So you should be checking on your campaigns anyway. And if you do that you will obviously be alerted to this when you start to see that you’re spending money and you don’t have any conversions yet.

Greg: [00:17:29] That’s your disclaimer. If you copied PFC campaign an AdWords Editor cloned it and start seeing actual dollars and no conversions. You did it wrong you did it because it still that functionality for some reason hasn’t made it to average better. Maybe when they rename it we’ll have it. That’d be nice hopefully.

Jess: [00:17:50] But I have to do is just pop in your settings and change it from clicks to conversions what you’re paying for and you’ll be back to normal.

Greg: [00:17:56] All right. So those are the six W’s. Now let’s talk about reality.

Jess: [00:18:01] The big R.

Greg: [00:18:01] The one R. In reality I haven’t gotten this to work well. I just I’ve tried some different things. I have some hope. I love the fact that there are impressions and clicks and zero dollars. It still gives me goose bumps when I see that.

Jess: [00:18:18] Good goosebumps.

Greg: [00:18:19] But I haven’t really gone into the work well what have you seen so far knowing that it’s been out for in reality a little over a month and a half.

Jess: [00:18:27] Yeah it’s definitely in its infancy and you can tell. I haven’t found a lot of success with it either. But I have noticed that if you don’t have ample budget and you can’t give your campaign breathing room it’s not going to do anything. So I think it’s really important for everyone that’s testing this to remember you have to have ample budget. You have to give it the space to do what it needs to do to play around to learn and really I mean it’s about kind of showing proof of concept and then you can always dial things back down. But if you don’t have enough budget to start you made that I mean not enough budget could be no budget at all. The other thing to pay attention to at least in my experience is your CPA. If it’s not realistic your ads are probably not going to show you’re not gonna get any impressions.

Greg: [00:19:05] Right and that should be in conjunction with the budget as well so that you have room in there to have multiple conversions within the budget to your first point. And it also is reminiscent to me of Facebook ads in the early days where you have to get some traction you have to almost come in high get some some proof of concept going that yeah I can get conversions and yeah Google you will get paid or Facebook back in the day you will get paid. And then once you see that then you can try to knock it down. I think that’s how eventually I’m going to find better success with it. It’s something I’m trying now.

Jess: [00:19:40] Yeah. And far less than scientific. So please don’t take my word as gospel here. But when I was playing around with this what I found that worked for me CPA wise was being at at least what the account averages are and not trying to be super optimistic which I’ve done with other target CPA bidding where I’ve scaled back a little bit and it’s worked in this case that it needs to really be realistic and so about the account average is a good place to start. Again you can always change that later.

Greg: [00:20:05] Yeah absolutely. And so this really. Is an amazing option that couple is giving us here and that. That is my main take away with this is if we can get this to work they’ll be phenomenal. The problem is many times when Google releases something it takes a little while for it to be fully fleshed out. I think we’ve seen it with customer intent for sure we’re at launch. It was a hack show and now it’s something that we use quite a bit and we have a shared client that we dominate conversions with and customer intent or even some of the smart betting options that were that were launched and didn’t work. You know they’re now coming to fruition. So just because you don’t find any success now doesn’t mean you should give up on it. This is like fairy par for the course. Again if you launch this product you need to refine it so you know maybe we can do this again in 2020 or something like that or we could talk about it on a podcast so Subscribe Today. But just because it won’t work for you now doesn’t mean that won’t. That is tried and true. Google fixing things and making it help sure.

Jess: [00:21:15] And what’s the worst that can happen in this case.

Greg: [00:21:18] You get free impressions. You get free clicks right. I don’t know.

Jess: [00:21:21] I mean you’re only going to pay if you get a conversion so there’s no reason not to test this again if you meet all the requirements in it and it makes sense for you.

Greg: [00:21:27] Absolutely. That is an amazing point and it is an amazing opportunity for all of us paid search advertisers and just digital marker marketers in general. And that is it for this episode of Marketing O’Clock ripped from the headlines our deep dive into the wonderful world of Google pay for conversion.

Jess: [00:21:51] And remember we’re here to help. So if you’re working with Google ads and you need some support with any of these changes or others just hit us up.

Greg: [00:21:58] And if you wanna read more about what we discussed here today. Head on over to Marketing O’Clock dot com for all the links and information.

Jess: [00:22:06] And while you’re there don’t forget to subscribe to marketing o’clock so you can get access instantly to these deep dives industry interviews that we do and also our famous Friday news show.

Greg: [00:22:15] And we will see you next week.

Read more about this update on the Cypress Blog >

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