Google Multi-Currency Bidding

One of my readers, Marc, posed the following question to me (thanks to my new contact page!).

Hi Vinny,

I have just recently found your blog, and greatly appreciate your views on search marketing, with a SA twist!

I have a question that no one has been able to answer and I hope you can help?
If I am based in the UK, but which to target another country only, such as
SA or USA, what would be the best option in terms of currency to use?
When I would create an adwords account I would select “based in UK”, but
then under “I wish to pay in” I can select the local currency.
Does the option I choose place any advantage or disadvantage over my cpc or ad position?

Your help is very much appreciated.
thanks again,
Marc Samouilhan

Thanks for the question Marc.  Funnily enough, we dealt with this issue many years ago, and I never followed up to see if it changed - maybe other readers can give insight on that.  When we posted this question to Google, the response was that all the bidding in the background is done in US Dollars, and then converted to the currency of the advertiser, using a daily spot rate.  In theory then, all bid increments should be roughly equivalent to increments of USD (cents) x Your Currency conversion rate.
Based on that information that we understood to be true at the time, I’ll answer your questions.

1.  The best currency to us, is US dollars.

2.  If you’re running multiple campaigns for multiple clients, it makes sense to try and standardize it to avoid currency nightmares due to fluctuations.

3.   In theory, there is a disadvantage during your campaign price analysis, as you now have to factor in currency fluctuations into the bid price increase/decrease.  You can also overshoot or undershoot the market CPC by placing a bid which a high currency variance (i.e. paying 5p instead of 9c, because the next step up charge is in 2c increments due to the strength of the pound).

My recommendation would be to use USD, based on the information I got a few years ago.  Does anyone know if this has changed?

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