Don't Drive Your Google Ad Cost Per Conversion Too Low

When you as the Google Ad Campaign Manager don't have a clear cost per conversion or cost per lead to aim for in the Google Ad Campaign, you're left with the task of trying to drive the cost per conversion down, down, down, as low as possible.

There are 2 problems with this strategy:

  1. Driving down the campaign's cost per conversion will eventually have an impact on total conversion volume. In other words, you'll get fewer conversions/leads in a given time period. Where do they go? To your competitors who are willing to pay more per lead. Which brings us to...
  2. You can't count on your competition being ignorant when it comes to how valuable leads are to their business, which means that if you just keep trying to lower your campaign's cost per conversion, eventually your competition will just get a larger chunk of the pie because they're willing to pay more per conversion/lead.

These are kind of just 2 angles on the same problem; you getting fewer conversions and leaving money on the table because you don't know what the true value of a lead is to your business. Ideally, you'd want to set up offline conversion tracking for lead gen campaigns so you can import offline sales conversion data and optimize your campaign based on return on ad spend (ROAS).

The same goes for ROAS too, whether it's for lead gen or ecommerce campaigns, the higher your target ROAS is on the campaign, the lower your conversion volume typically is.

This may be okay with you, maybe you're okay with maximizing ROAS or generating the lowest cost per converison possible at the expensive of generating more total conversions. It's bad if you want more total conversions  and you're focusing on growth.

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