How Target CPA Bidding can help your Digital Marketing Strategy

The Target CPA is a Google Ads Smart Offers strategy that sets offers to help you get the most conversions possible with the target cost per action (CPA) you define. It uses advanced machine learning to automatically optimize offers and bidding capabilities during the auction that adapt bids based on each auction. The target CPA bidding can help as a standard strategy in an individual campaign or as a portfolio strategy across multiple campaigns. In this article, we explain how target CPA bids work and how to configure them.

How it works

By using the historical information of your campaign and the evaluation of the provisional indicators presented during the bidding process, the target CPA automatically finds an optimal bid for your ad each time it is eligible to be published. Google Ads adjusts these offers to reach an average CPA equal to your target CPA in all campaigns that use this strategy.

Some conversions may cost more than your target CPA and others may cost less, but, in general, Google Ads will try to keep your conversion cost equal to the target CPA that you set. These changes in the CPA occur because your actual CPA depends on factors beyond Google’s control, such as changes to your website or ads, or an increase in competition in the ad auctions. Additionally, your actual conversion rate may be lower or higher than the estimated conversion rate.

For instance, if you set a target CPA of USD 10, Google Ads will automatically set your bids to try to get as many conversions as possible with an average of USD 10. To help you improve your performance in all ads bidding, this strategy adjusts offers based on indicators in real-time, such as the device, browser, location, time of day and remarketing list, among others.

CPA’s Objective

This is the average amount you want to pay for each conversion. The target CPA can influence the number of conversions you get. For example, if you set a goal that is too low, you may miss clicks that could lead to conversions and this would result in fewer total conversions.

If your campaign uses conversion history data, Google Ads will recommend a target CPA. This recommendation is calculated based on the performance of your actual CPA during the last weeks. When you create a new campaign, Google Ads will recommend a target CPA based on the historical data of your account conversions.

When setting a recommended target CPA, Google will exclude the performance of the last days to consider conversions that can take more than a day to complete after an interaction with the ad. You can choose to use this recommended target CPA or set the one you want.

Bid limit

It is not recommended to set limits for your target CPA bid strategy, as these may restrict the automatic optimization of the Google Ads bidding process performs. You can also prevent Google Ads from adjusting your bids to the amount that best suits your target CPA. If you set bid limits, they will only be used in auctions on the Search Network. Bid limits are only available for portfolio target CPA bid strategies (not for standard strategies).

  • Maximum bid limit: Is the Max CPC bid. You want Google Ads to set for keywords, ad groups, or campaigns that use a target CPA bid.
  • Minimum bid limit: Is the minimum CPC bid that you want Google Ads to set for campaigns or ad groups that use your target CPA strategy. Note that the Google Ads bid algorithm may set a Max CPC bid

Bid adjustments by device

Device bid adjustments in the target CPA allow you to prioritize conversions based on the device. You can set the settings for desktop computers, tablets, and mobile devices.

Unlike manual CPC bid adjustments, your target CPA bid adjustments modify the value of your target CPA, rather than the bids themselves. For better performance, you may want to remove your settings from the manual CPC bid when you change to target CPA.

If your target CPA is USD $10 and you set a bid adjustment of + 40% for mobile devices, your target CPA will increase to USD $14 on mobile devices. To prevent your ads from showing on mobile devices, you can set a bid adjustment for mobile devices of -100%.

Average objective CPA

Your average target CPA is the weighted average CPA based on which your bid strategy made optimizations. It includes the average of your bid adjustments per device, the target CPAs of the ad groups, and all the changes you have made to your target CPA over time. Due to these variables, your average target CPA may differ from the target CPA you set.

This metric allows you to measure the CPA to which your bid strategy was oriented for specific time periods. If you change the time period, you can see the actual value based on which your strategy made optimizations during that period. Remember that there will not be an average target CPA for periods of time without traffic.

How to pay for conversions

You can choose to pay for conversions, rather than clicks, on Smart Campaigns in the Display Network that use the target CPA bid. When you set up your campaign, go to the “Offers” section. Look for the heading called “Pay for” and select Conversions from the drop-down menu.

In Synapse Ads we guide you on how to use these types of tools. We offer you the keyword mixer tool that will guarantee the success of your conversion optimization. Your commercial growth is our priority and we have all the information to help your business improve every day.

 

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