Enable commissions-based bidding for your Product Listing Ads

Announcement: Max. CPA% bidding for Product Listing Ads going away

We'll be retiring the max. CPA% bidding Beta on June 30th, 2014. We recommend re-creating your campaigns in max. CPC bidding before that date. Learn more.

With Product Listing Ads, you have the option to use either manual cost-per-click (CPC) bidding, or cost-per-acquisition percentage (CPA %) bidding.

You can use CPA % bidding to pay AdWords based on a commission basis. You'll monitor sales and commission amounts by enabling Conversion Tracking for your campaign.

Before you enable this bidding option for your campaign, check out the following:

  • The benefits and functionality of CPA % bidding
  • How to set up your campaigns to use CPA % bidding

Note

Product Listing Ads can be targeted to the following countries, where Google Shopping is available: Australia, Austria, Belgium, Brazil, Canada, the Czech Republic, Denmark, France, Germany, India, Italy, Japan, Mexico, the Netherlands, Norway, Poland, Russia, Spain, Sweden, Switzerland, Turkey, the U.K., and the U.S.

Cost-per-acquisition percentage (CPA %) bidding is available to select advertisers in the U.S. only.

Conversion Optimizer isn't compatible with Product Listing Ads. If you switch your campaign to Conversion Optimizer, your Product Listing Ads will stop showing.

How CPA % bidding works

CPA % bidding focuses on conversions priced using a percentage of sale with a cap on the percentage. Note that the CPA % cost isn't calculated for the initial product clicked on by the customer, but rather for the actual products sold, which might or might not be the same.

Once a customer clicks your product listing ad, any purchase they make on your site within 30 days is a valid sale that can be attributed to your ad. Then, we'll charge a commission that's a percentage of the total sale, a percentage that you set the maximum for with a maximum CPA % bid. Just like a maximum CPC bid, your bid lets us know the maximum percentage of sale you're willing to pay as commission for a sale triggered by a product listing ad for your campaign. Also like the maximum CPC bidding model, we'll charge you the least amount necessary to maintain your ad's position.

Note that, for the purpose of billing, conversions are counted using a "many-per-click, and the last click wins" model. This means that the CPA % bid associated with the last ad click before conversion is used to calculate the amount you'll be charged, and if multiple conversions result from this same click, you'll pay a commission for all of them in aggregate.

How budgets work with CPA % campaigns

CPA % bidding is a pricing option limited to a unique group of advertisers with special requirements and system constraints specially designed to meet this bidding model. Due to the special circumstances of this bidding model, it isn't possible to set a budget limit.

Choosing a CPA % bid and forecasting performance

Just like your cost-per-click ad campaigns, we can't advise you on comparative bidding for CPA % bid campaigns. Bid the maximum amount you're willing to pay and we'll place your ad so that you pay the least amount necessary to keep its position on the page.

Due to the unique model of the CPA % bidding option and the frequently changing nature of the AdWords auction, we cannot offer forecasting or estimates for how your ads will perform based on CPA % bid changes.

How CPA % bids and CPC bids compete with each other

Similar to how ads with cost-per-click (CPC) and cost-per-thousand impressions (CPM) bidding compete, ads using CPC bids or CPA % bids can compete in the same auction for Product Listing Ads. Because the two pricing systems are different, AdWords uses a system of effective CPM, or eCPM, to compare and rank them whenever they're in competition with each other.

In the CPA % case, the AdWords system determines the eCPM by taking into account the likelihood of the customer clicking on the Product Listing Ad, making a purchase on the advertiser's site of an estimated amount, the advertiser's maximum CPA % bid, and other relevance factors.

In the CPC case, the AdWords system considers the bid, clickthrough rate (CTR), and other relevance factors.

Note

If a shopper clicks on your CPA% bid ad, then clicks on your CPC bid text ad, we'll only charge you for the CPC click, so long as both clicks occurred on ads within the same AdWords account.

Setting up your campaign for CPA % bidding

To participate in this bidding option, you'll need to have conversion tracking set up correctly to ensure that you're properly tracking conversions, sales, and pricing for specific products targeted by your campaign. Any error in setting up your account for conversion tracking with CPA % bidding means that your ads may not run, or that you may be charged incorrectly for completed sales.

There are two groups of steps that must be completed to set up Conversion Tracking and CPA % bidding for your Product Listing Ads campaigns:

  1. Select which conversions are valid for CPA % bidding.
  2. Implement the conversion tracking code.

Select which conversions are valid for CPA % bidding

Enable Conversions for CPA % bidding

You'll need to indicate which conversions are valid for CPA % commissions by enabling your campaign for CPA % bidding within your AdWords account. For example, if you're tracking signups, those wouldn't be valid conversions for commission purposes since they aren't products. To enable a campaign for CPA % bidding, follow these steps:

  1. Visit http://adwords.google.com/o/ConversionTracking/Manager. You can also reach this page by clicking "Conversions" at the top of your account's Tools tab. Conversions tab
  2. Click "New conversion" from the Conversions tab. New conversion
  3. Name your conversion and select the category you want to associate this conversion with. New conversion name
  4. Click Save and continue.
  5. Under Advanced options, select Applicable for CPA% commission campaigns. Conversion settings
  6. Once you click Save and continue, you'll be taken to the Code tab to configure your tracking code snippet settings.  
Edit Conversions with CPA % Bidding

To edit an existing conversion type you have previously set up for CPA % bidding, follow these steps:

  1. Visit http://adwords.google.com/o/ConversionTracking/Manager. You can also reach this page by clicking "Conversions" at the top of your account's Tools tab. Conversions tab
  2. Click the Advanced tab.
  3. Applicable for CPA% commission campaigns: Select Disabled or Enabled to select whether this conversion type is applicable for CPA% commission. Conversion tracking setting
  4. Click Save.

Implement the conversion tracking code

Once you identify the conversions that are eligible for CPA % bidding, you can follow the CPA % conversion tracking implementation guide to learn how to implement the code in your website.

Please note that the changes to the conversion tracking code are meant to provide Google with the data needed to be able to charge a commission on sales. This change must be done on the server side by your technical team since the actual value of the products sold needs to be filled in dynamically by your own sales tracking system on every transaction.

If your business's technical support or web development team cannot set this up for you, you can skip this step and set up your campaign for CPC bidding instead. CPC bidding for your campaign doesn't require the conversion tracking code.

Managing your CPA % bidding settings

Changing a campaign's bidding option from CPA % to CPC

The main difference for defining your product targets for CPA percentage campaigns is that specific product targets are defined using the "adwords_grouping" attribute in Google Merchant Center (Merchant CEnter) whereas multiple attributes are available to define product targets in CPC campaigns. The CPA percentage case involves additional synchronization with the data provided via conversion tracking, so only the "adwords_grouping" attribute is supported to ensure proper tracking and reporting.

Once you define this structure for your campaign, it becomes a CPA % campaign and it isn't possible to change its bidding structure back.

Understanding charge discrepancies for individual product target CPA% settings

Just like with CPC bidding, the AdWords Discounter automatically discounts the cost of your ads to the lowest price that keeps your Product Listing Ad appearing above your competitor's. The CPA percentage bid you define is a maximum, so we may charge you less than that amount, just like we do for maximum CPC bids.

Product targets and ad group bids

Product Listing Ads use the default ad group bid if no other specific product target matches the purchased product. For example, say the customer clicked on a Product Listing Ad for a running shoe but ended up purchasing a hat instead. If no other product target in the ad group with the clicked Product Listing Ad matches the attributes for the hat, then we'll use the default ad group bid.

Therefore, we recommend that for each ad group with Product Listing Ads, you specify all the various CPA % bids you want for all of your products as we use the CPA% bid of the purchased product in the ad group (not the clicked product).

Overlapping product targets and CPA % bid settings

If someone clicks on your Product Listing Ad, and:

  • the ad belongs to one set of products you've defined in a product target, and
  • they then purchase an item that matches a different product target in your account ...

... then we'll do the following:

  • Count the conversion towards the original clicked product target.
  • Charge the CPA % that matches the product target that actually matches the product type bought.

This model allows you to simply specify the maximum percentage you're willing to pay for the actual sale of different categories of products.

Example

Let's say you sell both shoes and hats. You create a product target for "shoes" with a maximum CPA % bid of 20%. However, you also create a product target for "hats" with a maximum CPA % bid of 25%.

A customer then searches for running shoes, and clicks your Product Listing Ad for one of your shoe products. Later, the same customer purchases a hat on your site. The conversion would be recorded with the first product target for "shoes" that drove the interested customer to your site, but you'd be charged using your second product target bid for "hats" since that was the actual product purchased.