A Guide to Properly Use Target CPA

Thelma Lanuza2 months ago

A Guide to Properly Use Target CPA

Thelma Lanuza [comments]

Target CPA is a fully automated PPC bidding strategy that allows you to set a target cost per acquisition at the campaign or the ad group level. This option doesn’t allow you to adjust bids at the keyword level. In many cases, this is an effective strategy because Google’s algorithm automatically bids to activate the average cost-per-acquisition goal specified at the campaign or the ad group level.

How It Works

Google uses historical data to flag user signals like location and device type to identify who is more likely to convert and then bid for ad placement based on the “quality” of each user.

For example, suppose Google determines that a campaign gets a higher conversion rate from females in a specific age range and location. In that case, the algorithm will then bid more to ensure that those particular users are more likely to see the ad.

The Do’s & Don’ts of Target CPA

This Google bidding strategy is beneficial to your PPC campaigns because it makes it easy to display your ads in front of relevant users. However, there are some things to consider before enabling this option.

When not to use this strategy:

  • It is essential to know the ideal cost per conversion for your business. This information is vital for this strategy to work. If you are not sure, it’s best to use a bidding strategy like Maximize Conversions instead.
  • When the budget is limited, if your budget doesn’t cover a healthy amount of daily clicks, avoid TCPA. This strategy doesn’t work well under a constrained budget. For example, let’s say your average cost per conversion is $50, and your daily budget is $50 or less. This amount is not enough for this strategy to reach its potential. You want to have at least two or three times the average CPA amount set as your daily budget.
  • A low conversion volume isn’t ideal for this strategy. Google will let you activate this bidding strategy even if you have zero conversions a month. However, it is not ideal to try this one out if you don’t have at least 15 conversions in the last 30 days. The more you have, the likelier it is to be successful.

Ideal scenario to use TCPA:

This bidding strategy is best for accounts that are not limited by a budget, have somewhere between 15-30 conversions in the last 30 days, and know their ideal cost per conversion.

How to Implement Target CPA

Once you determine that your account has the appropriate attributes for this bidding strategy, it is time to set the Target CPA goal.

We recommend you look at the average CPA for the last 30 days and then set the Target CPA goal based on that data. Your actual goal should be a bit higher than your actual average.

Let’s say the CPA average of the last 30 days is $50. You want to set the Target CPA goal about 10% or 20% higher than the actual target to give the algorithm some room to function correctly. So, in this example, we would recommend setting the goal at about $60.

It’s also important to remember that you might have some ad groups that behave differently and have a much higher or much lower average CPA. In these cases, you need to review the average CPA at the ad group level for the last 30 days and adjust the ad group level goal with the same logic as explained before.

Once you do this, you need to give the algorithm some time to adapt. This learning period usually takes about two weeks.

You can review how the campaign is doing every day to monitor it if CPC goes up more than expected. If this happens, you can lower the CPA goal. We don’t recommend adjusting the Target CPA goal more than once a week.

Optimizing a Campaign With Target CPA

Once you implement Target CPA in your PPC strategy, the way, you optimize the campaigns will change. Some crucial changes for Manual CPC will no longer make a difference to your campaign’s performance. Avoid implementing changes that will not improve your results.

Bid adjustments: Once you move to smart bidding, bid adjustments are no longer relevant. The bid adjustment would be treated as a target adjustment and will not directly impact your bids. Let’s say your Target CPA at the campaign level is $50, and you set a device level bid adjustment of -15%. This change will affect the Target CPA goal of $50 and not the bid itself.

Ad group level TCPA goals: It is essential to review the cost per conversion at the campaign level and understand how each ad group behaves and implements granular changes.

Keyword level changes: It is not possible to adjust bids at the keyword level with Target CPA. However, there are some ways to go around this if necessary. For example, if you notice that two keywords in one of your ad groups behave very differently, a good solution would be to move the low-performing keyword to its ad group. That way, you can have more control over the Target CPA for that specific keyword instead of pausing it.

Conclusion

Target CPA allows you to set a target cost per acquisition at the campaign or the ad group level. This strategy helps campaigns get as many conversions as possible at or below the target cost-per-action you set.

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