November 23, 2017

Can Conversion Rates Ever Be TOO High?

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never cold call again

In my previous post I mentioned reverting campaigns from Conversion Optimizer to Enhanced CPC.

The reason is that return on ad spend has been dropping, and I realized that it would eventually become unsustainable, and so I had to do something.

Here’s the interesting part: For the past year or so since moving those specific campaigns to Conversion Optimizer, I’ve enjoyed watching the conversion rate rise, from around 28% at the start, to a whopping 40% today, and even higher on good days.

However, even though conversion rates have gone way up, profitability is way down!

The answer for that is simple: When I was getting 28% conversion, I was paying around $2.50/conversion – and that’s when I turned on the optimizer. Unfortunately, ever since, costs have continued to creep higher. Over time I’d see traffic & conversions declining, and the only way to get it back up again was to raise my Target CPA.

With the conversion rate at or above 40%, today, the average CPA is running around $5.50 and climbing.

28% conversion at $2.50 CPA or over 40% conversion at $5.50 CPA? You do the math.

Conversion Optimizer is a great tool. However, it focuses only on one thing: Conversions. Expensive traffic tends to convert the best – that’s why everyone is competing for those placements – which means those conversions come at a high cost. Conversion optimizer is designed to look for those conversions, which will mean higher CPCs and resulting higher CPAs over time.

Sure, you get to name your Target or Max CPA, but what good does that do when traffic starts to sputter out, and your only choice is to raise those CPAs until they begin to approach absurd levels?

Based on the seemingly magical ability for the optimizer to send conversion rates through the roof, I have a feeling I’ll be revisiting it again in the future – perhaps the near future – but for now I’m giving it a break and bringing my CPCs and CPAs back to earthly levels.

never cold call again