Google Ads Target CPA Bidding: Benefits & Drawbacks
Target CPA bidding is Google’s fully automated bid setting that allows account managers to set a target cost per acquisition for their campaigns. Google considers historical account conversion data and user-specific contextual data to set an auction bid with the goal of achieving the campaign manager’s desired CPA.
Target CPA Settings
Target CPA eliminates many variables that must be actively managed within manual bidding campaigns. There are a handful of settings available to customize Target CPA campaigns for the account’s goals.
The primary settings for the campaign will be the Target CPA and budget for the campaign. These settings are relatively straightforward and should be selected based on the budget and acquisition goals of the account.
Bid limits are also available for Target CPA bidding when using a portfolio bid strategy. The max bid limit will prevent Google from bidding above a desired CPC within an auction on the Search Network. Bid limits will disrupt Google’s ability to optimize to a Target CPA in many situations, however, this setting is useful for situations where the goal CPA is extremely low.
Minimum bid limits are also available for portfolio bidding. There is no situation that I’d recommend adopting minimum bid limits unless the campaign goal is to waste money.
Conversion tracking must be setup for Target CPA bidding. If multiple conversions are setup, specific Conversions can be selected within campaign settings to further optimize delivery.
Device adjustments are available within Target CPA bidding campaigns. This allows campaign managers to specifically target desktop or mobile devices or create multiple campaigns with similar goals that are segmented by device.
Target CPA bidding is most frequently implemented in B2B lead generation campaigns. If you haven’t tested Target CPA bidding before, I’d recommend testing a desktop-only campaign with a higher budget. In my experience, the quality of B2B leads is typically higher on desktop. Segmenting campaigns by device allows for Target CPA goals to be differentiated based on back end qualification rates of desktop vs. mobile leads.
Pay for Conversions is a setting available within Target CPA bidding. This setting allows the business to pay for each conversion instead of the clicks. This setting allows Google to deliver as many conversions as possible at the Target CPA goal, while only being constrained by the budget.
Campaign managers should be EXTREMELY careful when using this setting, especially when the optimal CPA might be unknown. Google says that campaigns can spend up to 2x the daily budget, but will not overspend the monthly budget. That said, I have experienced campaigns with Target CPA bidding and Pay for Conversions selected that have spent more than 7x the daily budget. Get more info on avoiding overspend in automated bidding campaigns in my previous blog Target CPA Bidding: Avoiding Over-Delivery.
Analysis
Target CPA offers major benefits for accounts with many campaigns, by streamlining the bidding process. It is most effective for B2B Lead Generation for accounts because it optimizes toward a CPA or CPL that is deemed profitable for the company. Target CPA also allows accounts to leverage the prodigious power of Google’s machine learning to their benefit.
That said, Target CPA bidding can fail to hit goals if historical conversion data is limited or if the CPA goal is unrealistic for the industry. This setting can also limit conversion volume and budget delivery, as it focuses bidding on auctions that are likely to have a higher conversion rate.
It is important to understand that campaign managers are giving up a large amount of control with this type of automated bidding, however, there are also clear benefits to opting in. As with all automated tools, user mileage may vary based on account specifics.
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