Google Ads Target CPA Tutorial | What Is It? And How To Use It


Hello and welcome to this video. My name is Silvio Perez. In this video I’m going to be talking about
what target CPA bidding is so you can understand it and not only understand it, but be able
to implement it and then optimize it moving forward. So to get started, go ahead and hop into your
Google Ads campaign tab and click on the campaign you want to set target CPA bidding for. Once you click on that campaign, go down to
settings. Then from there we’re going to click on bidding
and we’re going to click change bid strategy, click it again. THen in this drop down menu we’re going to
see all the different automated bid strategies and then the manual strategy at the bottom. So we’re going to click on target CPA. Then once we have targeted CPA clicked on,
we can set our target that we want to reach. Now what is target CPA? Target CPA stands for target cost per acquisition,
otherwise known as target cost per action. But essentially it’s the target result that
you looking to reach. So in the case of target CPA, you’re going
to tell Google, hey Google, I want to get leads, in this example, for $50. Then Google is going to use their machine
learning to set your bids automatically for you so you didn’t have to worry about setting
bids. Google’s going to go ahead and take care of
that and they’re going to set their bids for you to make sure that somewhere around $50
you reach that target. It can be about 20% over or under, depending
on the account and the amount of conversion volume you have, but usually around 20% under
or over Google is going to reach that target that you set. So it might not be $50 maybe it’s $60 or maybe
it’s $40 or somewhere in between. But that’s essentially what targeted CPA bidding
is. You’re going to tell Google, this is my target. I want you to go ahead and take the reins,
set my bids, and I don’t care what you set my bids as. I just want to make sure that I’m somewhere
in the ballpark of reaching this number, this goal. And that’s what target CPA bidding does. Now there are some caveats of target CPA bidding
that you should be aware of. First and foremost, you cannot do target CPA
bidding if you do not have conversion tracking enabled. Target CPA bidding is all conversion focused. So if you don’t have conversion tracking enabled,
you need to go ahead and enable that first. The second thing as well is even though you
might just enable conversion tracking or you’ve had it in your account for a while, I don’t
recommend doing target CPA bidding until your account has enough conversion volume, enough
conversion data. Google recommends I at least 15 conversions
within the month for your account before enabling this type of bid strategy. So really this type of bid strategy works
best when you have enough information, enough conversion data that Google can leverage so
that they can make better decisions when it comes to setting those bids for you. Another thing that I’ve realized and I’ve
experienced in the past is if you set target CPA bidding too soon or if you set the target
CPA limit too low. So let’s say for example, your average cost
per click is $10. On average you spend about $10 every click
and you set your target CPA limit at $10 and you know on average it’s going to cost you
$10 a click. So then you know just mathematically you’re
never going to get a lead for $10 when it costs you an average $10 a click unless you
have 100% percent conversion rate, which is not reality, right? So if you set your target CPA limit too low,
what can happen is is you end up suffocating your keywords and your bid prices and Google’s
going to set your bid so low that your ads are never going to show. So it’s just something to be mindful of. Don’t set your target CPA too low where your
account gets suffocated and then your ads are never getting seen. And then instead of getting more conversions
or at least conversions at a decent costs, you’re not getting anything. So that’s something to be mindful of that
I’ve experienced in the past. So best practices. Try to set a target CPA limit a little bit
higher than what you would like and that way you can give Google enough room. Then from there, this is the optimization
phase, how you’re going to optimize your target CPA bidding is once you set that limit, see
how it goes, see how it performs, give it some time, see if Google is reaching your
target CPA, if they’re a lot higher or under about 20% but just kind of see what the results
are. Then from there you can kind of taper down
or taper up depending on if you want to get more conversions and you’re necessarily okay
with spending more and you want more volume, well then try testing raising your target
CPA limit maybe by $5 or $10 or a couple of dollars up, and then see where you get enough
conversion volume now, and the cost per lead or the cost per acquisition isn’t so much
where you’re okay with that. That’s in the case that you want more volume. Now the total opposite of that is in the case
that you don’t want as much volume, but you want less leads but more leads at the right
price, for example. So you’re not necessarily interested in getting
more leads, but you’re okay taking less leads, but you want less leads at a great price. So if that’s in the case, then you’re going
to do the opposite. So instead of raising your target CPA and
seeing how that works, you’re going lower it. So maybe lower it by five or $10 or a couple
of dollars within that, and then see how that performs. That’s kind of how you would go about optimizing
this bid strategy. So this is kind of a hands off bid strategy. Google’s going to do all the heavy lifting
for you. They’re going to set your keyword bids. So from an experiment basis, you’re going
to test experimenting those different target CPA points, whether your goal is more conversions
or your goal is a reduced cost per lead, you’re going to go ahead and test either increasing
that target CPA or reducing that target CPA. All right, so I want to go ahead and show
you an example of an experiment that was run implementing target CPA bidding and the results
that we’re seen. And a great way to, by the way, if you’re
using any other type of bid strategy right now, whether it’s manual, maximize clicks
or anything and you’re thinking about into target CPA, instead of just rolling out that
change right away into your account, I recommend doing a campaign experiment first. If you’re not familiar with how to do a campaign
experiment, you can go ahead and check out my video that I created on how to create a
campaign experiment. I’ll put it in the show notes in the description
below and you can go check that out. But go ahead and make sure you run a campaign
experiment first that way you can test safely if the CPA bidding is actually going to help
you versus hurt you. I want to show you a real example of an experiment
ran on target CPA bidding and the results that were received. So for example with this experiment, basically
the results were $33.50 cost per conversion using target CPA bidding versus the original
of $47.75 without target CPA bidding. Then with average cost per click, the original
was about $10.10 average cost per click. Then with target CPA bidding it was about
$5.14 cost per click. In the case of this experiment, in this account,
the trade off between conversion volume and cost per lead was worth it. We were okay taking less conversions for a
better price. So I recommend if you are interested in doing
this, go ahead and run an experiment and see what the results tell you. So that’s going to be it for this video. If you got some value from this, please go
ahead and make sure to subscribe and follow along the channel. I create content every week. And make sure to check out the description
for the link to that video on how to create Google Ads campaign experiments if you’re
not familiar with that. So that’s it. Hope you have a good one. See you next time. Take care.

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