Google Ads: Pay Per Conversion for Google Display Ads

Google announced an option to pay for conversions in the display network. This is pretty big news.

I would say it was predictable and think Google is going to have to move more towards a pay for conversion model. I believe the reason is that the cost per click has just gotten too high for a lot of business owner thus pricing them out unless they’ve a got huge budget. Google is seeing people leave the platform and put that budget into Facebook. I’m excited to see a pay for conversion model with Google.

You may have seen something like this used for service industries. For example, programs called Local Search or Local Services Ads by Google are guaranteed  a pay for lead model.

What is a Conversion, Anyway?

Before continuing, let’s make sure you know what a conversion is. When I talk about a conversion I’m referring to a phone call, a form fill or whatever desired outcome you designate as a result of someone using your website.

You could set it up conversions for a lot of things. You could set up a conversion to mean someone leaving your site to go to another site, because maybe that’s the whole goal of your site. A conversion could mean someone downloaded your pdf.

Why Paying for Conversions in the Display Rocks

The Display Network is made up of over two million sites. It’s 90% of the internet out there. You see display ads all over the place. Display ads are placed through the Google platform, the Google Ads platform.

pay per conversion

One of the problems I have with Display is that it allows a lot of app traffic to come it – not always a good thing. Sometimes the websites where our ads are placed are not that good. However, the targeting has improved significantly.

With this new change, instead of paying for irrelevant clicks I can pay for actual conversions. This is a huge step.
Now, there are a couple caveats that make paying for conversions in the display network a limited option thus leaving some unable to implement this bidding strategy.

That’s okay, at least we’re moving in the right direction.

Requirements for Implementing Pay Per Conversion

100 Conversions in the Last 30 Days

You have to have at least 100 conversions in the last 30 days to implement this type of bidding. This requirement could block many people from using it, but that’s a good thing. Here me out. Google is doing this stuff using machine learning. They need a sufficient amount of data inside of your Google account to know who is likely to complete a conversion.

Google Display Network

This rings true for all of their automated strategies. You should never go after an automated strategy right off the bat when you start Google ads, because everything is based on data. If you don’t have enough data in your account for this to make sense, then the automated strategies are not going to make sense. Think about it, what will the automation base its decisions on? Google doesn’t have that information out there. They need to learn what your conversions are and what people who convert for you look like in order to automate.

Most of our new clients don’t have that kind of data yet. They don’t have their conversions set up, because it can get a little technical. However, conversions and goal completions need to be set up. You’ve got to know the results of your campaign.

Lag Time

The other thing is, there is such a thing as lag time. From the time that somebody gets to your site, until they actually complete a goal completion or conversion: it has to be less than seven days.

pay per conversion

This means if you have a long B2B sales cycle this bidding strategy isn’t going to work for you. However if you have a short goal completion window, less than seven days, and have lots of goal completions, you’re good. I can see this working for smaller products, smaller buy ins. Additionally, to get to a 100 you need to have a decent budget.

How to Set Up Paying for Conversion in the Display Network

Set up a regular Display campaign. When you get down to the bidding structure, bid for target CPA. That’s Target Cost Per Acquisition, cost per lead, or cost per conversion, however you want to say it. But, Google has it at Target CPA. When you select that option, your target CPA needs to be less than 200. That’s also a stipulation. Then, you will have the option to bid only for conversions. Simple.

From there, you can put all your targeting layers on top of it. There’s targeting by demographics, age, income and topic.

Digital Marketing Objectives

You can bid for a particular topic so that the websites your ads are placed on are related to relevant topics of your choosing.

For placement, you can choose a particular placement as in a particular website, page, or app of your choice. You can build affinity audiences based off of keywords and/or websites that your audience might be familiar with. You could target your remarketing audiences, as in people who have been to your website before or people who have interacted with your YouTube videos; there are lots of options here. You can go mobile, you can not go mobile. Lots of different things that you need to test.

There are no guarantees in the display network. Just because you do it doesn’t mean it’s going to work. The introduction of pay per conversion helps in that I”m not just paying for clicks; I’m actually paying for conversions.