Extended CPC
Extended CPC - Enhanced Cost Per Click, is an additional feature that you have the opportunity to use in addition to manual bidding. Extended CPC works in such a way that Google's "robots" will try to maximize conversions by bidding higher than your maximum CPC if it considers that the probability of a conversion is high. Conversely, they will also bid lower if the probability of a conversion is low. This is all for the purpose of hitting an average CPC equal to, or very close to, one's maximum CPC.
Extended CPC is often confused with target CPA, but there are significant differences. Target CPA sets a conversion price that Google must hit. With extended CPC, you allow Google to bid higher than the specified conversion price if a conversion is more likely. Likewise, Google will bid lower if there is less likelihood of a conversion.
Benefits of Extended CPC:
- If you have enough data in your account, it may be a good idea to give some control to Google. Google's computers and algorithms are very efficient and can make decisions in relation to bids that would normally have taken you a long time to analyze.
- Normally one will set a highest price per. conversion. This can be a price that is too low compared to potential conversions. With Extended CPC, Google can offer Real-time, and thus potentially "capture" consumers who would not have seen the ad with maximum CPC.
- Working competitively with Google Ads can be a time consuming task. But with Extended CPC, you can make sure your budget does not run wild without taking up too much of your time.
Disadvantages of Extended CPC:
- Extended CPC is only effective if there is enough data in the account for Google's computers to bid qualitatively.
- With Extended CPC, you lose some control over bidding. The only thing you can control is your max CPC and you will not get any information about what Google is offering on likely conversions.
- Google is a platform based on earnings and it is not always that it is a profitable platform for their advertisers. Their decisions can often benefit Google more than your business. It is algorithms that make the decisions and not yourself.