Google has launched a new automated bidding feature that aims to improve the return on investment from AdWords campaigns by increasing conversions while reducing cost per acquisition (CPA).

Writing on the Inside AdWords blog, Dan Friedman said Enhanced CPC uses a pay per click marketing campaign's historical conversion tracking data to automatically adjust maximum cost per conversion (CPC) bids based on the probability of an ad converting.

"As a result, you should receive more conversions while maintaining or reducing your overall CPA and hopefully spend less time managing your max CPC bids," he said.

If a term is highly likely to lead to a conversion, Enhanced CPC will bid up to 30 per cent above the maximum CPC.

Conversely, if a user's search has performed well in the past, it will lower the bid for that particular auction.

Furthermore, it can identify specific words within a phrase, such as kit, that have converted well historically and will adjust bids on variations of these terms, like model airplane kits for children.

Enhanced CPC also detects a user's location, browser, operating system and language settings and feeds this information into its analysis of a likely conversion.

In related news, Google recently announced that an updated AdWords keyword tool will be launched in September.

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