By reviewing the tool, reading the FAQ, and drilling into the answers that Google provides, you can really gain some insight into how the tool works. In addition, if you read the Success Stories, you will get a better understanding of whom the tool is best suited for. I have taken the liberty of dissecting the tool, the FAQ and the Success Stories so that you don’t have to.

The Tool:

The name of the tool is a bit misleading. A true “Conversion Optimizer” would be an algorithm that determines the ideal bid price and ad position for your ads to produce the maximum amount of conversions for your given ad budget. Google’s Conversion Optimizer works to get conversions at a desired cost-per-acquisition (CPA). These are two entirely different things.

Google’s Conversion Optimizer focuses on achieving a CPA that you set yourself. In order to do that, Google looks at each keyword’s historic conversion rate and then at your desired CPA to set the appropriate bid price. For example, if you have a keyword that historically converts at 1% and you set a desired CPA of $10, Google would take your desired CPA of $10 and divide that by the number of people needed to historically convert (100) in order to set the appropriate bid ($.10).

One of the problems with this method is that it ignores the position that your ad will receive. A bid price of $.10 may not be high enough to get your ad to appear on the first page of Google. Since 80% of internet users never go beyond the first page, your ad may not be seen often enough to convert as much as you would like.

The basic limitation of the new tool is that the Conversion Optimizer focuses on achieving one metric (CPA) in spite of others that are far more important, such as profit, sales, and other conversion types. At the end of the day, the most important metric to any business is profit. If you are managing your online advertising or using a “conversion optimizer” that focuses on any metric but profit, you may be doing more harm than good.

I worked with a client that had an ad agency that was focused on lowering his CPA. Week over week they showed this client how their CPA was dropping. The client thought this was great. Then, one day he dug into what was occurring. He looked at what his revenue was from his advertising in terms of total revenue, revenue per order, and profit per order. He realized that as his CPA got lower so did total revenue, revenue per order, and profit per order. He then realized that the goal of achieving a lower CPA did not achieve the goal of an increase in profit.

The Conversion Optimizer, along with most other tools, calculates the CPA in an illogical manner. The Conversion Optimizer credits a keyword with a sale when it is the last keyword clicked on prior to a purchase. This allocation model completely ignores the keywords that might have been clicked on prior to the last keyword. Marketers all agree that it generally takes more than one keyword to generate a sale. Given that is the case, why do the tools only give credit to the very last keyword that was clicked? If more than one keyword was clicked prior to a purchase, shouldn’t all of the keywords involved get some form of credit? This is what I call the Purchase Path.

The Purchase Path looks at all of the keywords that led up to a sale and gives each keyword some form of credit. Therefore, each keyword gets some form of a CPA vs. just the very last keyword. This method gives a much more accurate picture of how your advertising is working and ensures that you are not turning off keywords that happen earlier in the buying cycle. If you do turn off keywords that typically occur at the beginning of the buying cycle, the keywords that typically occur at the end of the buying cycle will suffer. They will suffer because they will get fewer opportunities to close since the keywords that used to assist in their sales are no longer present.

If you repeat your keywords with every other word on every line, then your site will probably be rejected as an artificial site or spam site.

Keyword density is always expressed as a percentage of the total word content on a given web page.

Suppose you have 100 words on your webpage (not including HMTL code used for writing the web page), and you use a certain keyword for five times in the content. The keyword density on that page is got by simply dividing the total number of keywords, by the total number of words that appear on your web page. So here it is 5 divided by 100 = .05. Because keyword density is a percentage of the total word count on the page, multiply the above by 100, that is 0.05 x 100 = 5%

The accepted standard for a keyword density is between 3% and 5%, to get recognized by the search engines and you should never exceed it.

Remember, that this rule applies to every page on your site. It also applies to not just to one keyword but also a set of keywords that relates to a different product or service. The keyword density should always be between 3% and 5%.

Simple steps to check the density:
• Copy and paste the content from an individual web page into a word-processing software program like Word.
• Go to the ‘Edit’ menu and click ‘Select All’. Now go to the ‘Tools’ menu and select ‘Word Count’. Write down the total number of words in the page.
• Now select the ‘Find’ function on the ‘Edit’ menu. Go to the ‘Replace’ tab and type in the keyword you want to find. ‘Replace’ that word with the same word, so you don’t change the text.
• When you complete the replace function, the system will provide a count of the words you replaced. That gives the number of times you have used the keyword in that page.
• Using the total word count for the page and the total number of keywords you can now calculate the keyword density.