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Target Cost Per Acquisition is a bidding strategy that gives you the option to set a value for each customer google brings on your ad. This allows you to pay google only when someone converts (fulfill the purpose of your ad).
Your past ad campaign conversion history determines the value of your CPA. So, businesses that are new to google ads can’t generate sales from this.
Once you have your bidding value set, google ads will focus on driving as much conversion as your budget allows based on your cost per acquisition.
However, for keywords with higher performance, google might increase your bid cost and reduce it on those with lower performance to even out your CPA.
Let’s say data from your previous campaign puts your conversion rate at $1-$2 per click. For your new campaign, you set your CPA as $1 on a $400 daily budget. Google will mostly go for keywords this much but also for those beneath and slightly above this rate. This will allow the service to bring the highest conversion possible on your CPA and budget.
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Things to be mindful of in CPA?
To benefit from target CPA, you need to have at least a month’s worth of ad campaign data. This allows Google ads to have enough performance data to wisely optimize your bids to generate the most sales for you.
It also allows you to set a realistic CPA for your campaign. For the best performance, your previous campaign should have seen 30 to 50 conversions in the last 30 days.
You can’t determine the min and max cost of your CPA
When running an individual campaign, you can only set a CPA average that google works with. This allows Google to go as high or low as it deems necessary.
Only advertisers running a portfolio ad (multiple ad groups or ads) can set a min and average.
Conversion tracking let’s google know when it is driving conversion. Have this enabled on your ad to avert wasting your budget..
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Frequently asked questions
Target CPA is a Google Ads strategy where you decide how much you want to pay for each potential customer, and Google adjusts keyword bids to get you the most leads. Find out more here.
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