CPA Bidding
With a focus on conversions at a specific cost-per-acquisition, use CPA bidding. This is also known as Conversion Optimizer.
Advertisers who want to target a specific cost per acquisition/conversion must have at least 15 conversions in 30 days to use this. The conversions history allows AdWords to predict future conversions.
Because Conversion Optimizer automatically applies its own bid adjustments, it isn't compatible with the new enhanced campaigns bid adjustments across days, times, locations, and devices (except for mobile opt-out at -100 percent.). Display bids also don't work. If you turn on Conversion Optimizer with existing bid adjustments, they will simply be ignored.
There are two advanced options for this bid type: Max CPA and Target CPA. The Target CPA is the average CPA you are willing to pay, and Max is the maximum per conversion. The Maximum CPA is scheduled to be discontinued in 2014. Google recommends a CPA, based on history, which can be used or advertisers can set their own.
maximum you’re willing to pay for a conversion. As you can see from the example above, you typically want to set your max CPA significantly higher than the CPA you actually hope to achieve, because as with any average you’ll have some outliers. Managing to a max CPA is a good way to keep a handle on costs by forcing Google’s tool to stick to a specific high-end CPA. You can keep costs down by setting a more conservative max CPA (which may sacrifice volume, but is more likely to keep your margins intact).
With target CPA you’re once again granting Google a bit more leeway with your bids – rather than specifying a higher end number you want them to stay within per conversion, you’re giving them a specific goal to try to reach. As we can see in the example above we’ll set the target CPA to the number we actually want to have the campaign convert at rather than a max CPA that’s a bit higher.
Typically these two methods tend to work similarly if you allow the tool to work over time, but with target CPA you’re affording Google a little more latitude, so for campaigns where you’re hypersensitive about controlling costs (particularly initially, as the tool frequently takes an extended period of time to “get its footing” and start to effectively manipulate your bids to your CPA maximum or target), maximum CPA may be a better option.
There are two advanced options for this bid type: Max CPA and Target CPA. The Target CPA is the average CPA you are willing to pay, and Max is the maximum per conversion. The Maximum CPA is scheduled to be discontinued in 2014. Google recommends a CPA, based on history, which can be used or advertisers can set their own.
maximum you’re willing to pay for a conversion. As you can see from the example above, you typically want to set your max CPA significantly higher than the CPA you actually hope to achieve, because as with any average you’ll have some outliers. Managing to a max CPA is a good way to keep a handle on costs by forcing Google’s tool to stick to a specific high-end CPA. You can keep costs down by setting a more conservative max CPA (which may sacrifice volume, but is more likely to keep your margins intact).
Typically these two methods tend to work similarly if you allow the tool to work over time, but with target CPA you’re affording Google a little more latitude, so for campaigns where you’re hypersensitive about controlling costs (particularly initially, as the tool frequently takes an extended period of time to “get its footing” and start to effectively manipulate your bids to your CPA maximum or target), maximum CPA may be a better option.
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