Google’s Smart Pricing automatically lowers the cost for clicks on pages in the Display Network that are less likely to convert into customers. For example, if you sell tennis racquets you might pay less for a click from a tennis news site than from a site that reviews tennis equipment since people reading reviews are more likely to be buyers. Smart Pricing on the Display Network can help achieve a lower cost-per-conversion than on the Search Network.
Your actual cost is typically less than the bids that you set. This is in part because the AdWords Discounter monitors your competition to ensure that you pay the lowest price possible to keep your ad's position on the page. After each auction is run and your ad is ranked, the AdWords Discounter adjusts your actual CPC so that you pay the minimum amount required to exceed the rank of the next ranked ad.
The Conversion Optimiser uses your AdWords Conversion Tracking data to get you more conversions at a lower cost. How? Google technology finds your best auction placements - the ones most likely to turn into conversions for you. Then it adjusts those placements to get as many profitable clicks as possible.
Campaigns adopting the Conversion Optimiser achieve, on average, a 21% increase in conversions while decreasing their CPA by 14%. (1)
(1) This analysis compares the performance of the Conversion Optimiser campaigns with a control set of campaigns and represents the average impact of the Conversion Optimiser. The actual impact will vary from campaign to campaign (and a small number of advertisers could conceivably perform better without the Conversion Optimiser).
Match.com International increased conversions by 84% while decreasing cost-per-acquisition by 35% with Conversion Optimizer.