What is Target CPA bidding for Conversion Optimizer?
Target CPA bidding is an enhancement to Google’s Conversion Optimizer, a tool launched in 2007 to improve an advertiser’s ROI. With Target CPA Bidding, an advertiser can set a bid that reflects the average amount they’d like to pay for a conversion rather than the maximum they’re willing to pay for it. Marketers have the choice of using the current “Maximum CPA” functionality or this newly offered “Target CPA” functionality.
How Does Target CPA bidding for Conversion Optimizer work?
For a brand to have the ability to use Target CPA Bidding for Conversion Optimizer, they must already be using Google’s conversion tracking, and have received 15 conversions within the last 30 days. This requires a Google tracking pixel to be placed on pages that are deemed a conversion (i.e. thank you pages).
To enable Target CPA bidding, visit the “Campaign Settings” tab in your AdWords account, select “Focus on Conversions” and then click “Advanced Options.”
Based off of these modifications of account settings Google will analyze the conversion tracking data, and then automatically adjust bids to reach the requested CPA target.
Advantages of Target CPA bidding for Conversion Optimizer?
For brands that are interested in a reaching strict ROI goal, have Google conversion tracking already in place, and are not concerned about volume of conversions, Target CPA bidding might be a good fit, given it should ensure that the advertiser is receiving conversions at their requested price.
Disadvantages of Target CPA bidding for Conversion Optimizer
Advertisers will need to add additional code to their page, and as a result share their backend information with Google. Sharing this much information with their partner vendors may not be ideal for all advertisers. If an advertiser has multiple goals for their search campaigns Target CPA bidding (and/or conversion optimizer in general) may not be a very good suit. Conversion optimizer will focus on driving efficient conversion rates at the expense of any other goal.
While conversion optimizer focuses on getting advertisers conversions at their requested price, it prioritizes increasing the quantity of these conversions below the primary “price” goal. As a result of this prioritization an advertiser that is opted into conversion optimizer may lose out on overall conversion volume.
Also, because Conversion Optimizer is automated, the system may not be taking into consideration nuances and seasonality relevant to that specific advertiser. As a result keywords that may not have performed well at one point in the campaign may be designated as ineffective by the automated system, and as a result not tested again in the future when they may have more value.
We recommend testing Target CPA bidding if you are already opted into Conversion Optimizer as Target CPA bidding may prove to be a better approach to obtain your overall ROI goals.
It should be noted, however, that Conversion Optimizer only makes bid adjustments based off of keyword performance, and does not factor in a campaign’s targeting, ad copy, landing page quality and general account settings. Consequently, while Conversion Optimizer adjusts bids, you will still need to continue testing and optimizing other areas of your campaigns.