Exciting changes are on the horizon for Microsoft Advertising users. Starting May 13, 2024, Microsoft is set to upgrade all existing image and feed campaigns from manual cost-per-click (CPC) bid strategies to the more dynamic enhanced CPC. This transition is anticipated to span a few days, aiming for completion by May 17, 2024. In an additional move to streamline bidding strategies, manual CPC bidding for new native campaigns will no longer be available from April 30.

Why the switch to Enhanced CPC? Microsoft champions enhanced CPC for its ability to fine-tune bids in real-time based on the likelihood of conversion. This means bids could be increased for auctions with a high conversion potential and decreased for those less likely to convert. The core of this strategy respects the advertiser’s base bid, optimizing it at auction time to boost performance and drive conversions. This ensures competitive standing in the fast-paced marketplace without ever exceeding the set base bid.

What’s in it for advertisers? The shift to enhanced CPC is designed to enhance advertiser performance through smart adjustments. It utilizes a combination of signals, including search queries and bid modifiers, to make informed bidding decisions. Starting from the bids set by your bid management tool, the system adjusts to optimize outcomes.

Need for optimization: As campaigns migrate to enhanced CPC, advertisers are encouraged to optimize their settings to align with their marketing goals. Although no immediate action is required for the transition, leveraging conversion tracking, uploading offline conversion data, and adjusting the attribution model to “last touch” can significantly improve campaign performance.