What is target CPA? I have said in many previous posts that the current Google Ads battle is no longer about the top race. It’s all about how to get the most customers and revenue. And this is measured in Google through conversions.
And using a manual CPC bidding strategy has its limitations, with optimization often failing to deliver the expected conversions. Thus the Target CPA strategy was born.
Let’s learn what target CPA strategy is and how to use it most effectively.
CPA (short for cost per action) – i.e. cost per action (the action here is the conversion you have set up). So for Google Ads, CPA means cost divided by the respective conversion.
This is what Google calls a smart bid. That is, Google will decide all ad bids that you will not be able to touch. You will not be able to increase or decrease your bid as you please.
It’s also about getting the most conversions within your chosen budget.
How does it work?
The Google Ads algorithm is supposed to automatically find the optimal bid for your ad based on previous data history and make real-time bidding decisions. Target CPA should be used after you have implemented campaigns like CPC, CPM or CPV etc. This is in order to know how much each conversion will cost in the market.
At pcweb.info they recommend that, for a campaign that is just beginning to be created (around 30 days), you choose a manual CPC strategy for yourself so that Google can understand the customer behavior that generates conversions in the ads. Then, if you switch from Manual CPC to Target CPA, your ad will perform the best.
If you set a target CPA from the start, it will take time for your ads to learn to understand customer behavior. During this time, the ads will not be displayed in the best light. Similarly, for other campaigns like CPM, CPV is also the same
Some conversions cost more than the target CPA, others cost less than the target CPA. But, on average, Google will optimize to bring this CPA level to a level equal to or close to the target CPA you’ve set.
Is target CPA that effective?
The first mistake people make when they think of target CPA is thinking that they will do everything for you. Because almost when you use Target CPA, you don’t have to make any adjustments, just keep an eye on it.
At its core, CPA is a tool that builds on your existing data to optimize. This means that if your pre-existing data is wrong, your projection will be awful. Wrong measurement leads to wrong optimization.
If you don’t monitor it regularly, it’s easy to see spikes in spending, dips in conversions, etc. This happens due to many different subjective factors.
Therefore, you must monitor and, if so, you must influence to achieve effectiveness.
Waiting time: What is target CPA?
Based on Google’s advice, it’s recommended to let the campaign run at Target CPA for 7-14 days because this is the best time for Google’s machine learning to optimize the data.
However, the mentality of many people is quite hasty. After seeing the account running for 3-5 days but not converting or converting poorly, hurry to deactivate it. Doing this leads to an ineffective Target CPA campaign.
Conditions to use Target CPA?
There really is no way to start executing a Target CPA strategy other than to measure conversions. But the condition I want to talk about here is to help make your Target CPA strategy more successful.
Make 15 conversions in 30 days – This is the first condition to help Google automatically learn certain data. I always recommend that to be safe, 30 conversions / 30 days will reduce the initial machine learning time and the effect will be achieved faster.
Budget greater than the CPA you set – Your budget must be at least 4 times greater (Google recommends 10 times) than the CPA you set.
Example: The CPA you set is 70K. So the budget should be 700K or at least 280K to achieve a good effect.
Why does the average target CPA often not match the target CPA?
Answer: That’s right. Target CPA is the CPA you set so that Google understands the goal you want to achieve. Google’s machine learning system will be optimized to closely match this target CPA. But actually, there may be a slight difference. Or the difference is a lot if you use it wrongly
Run Target CPA Pay for Conversions?
A: This is an option that is only available for Display campaigns. That is, instead of paying for clicks or impressions as usual. So with this adjustment mode You will only pay when there is a conversion.
Valuable external resource: Google