What is Target CPA Bidding?


Hello Ad Grantees! My name is Ezra, and I’m on the Google Ad
Grants team. In this short video, I’ll explain how Target
CPA bidding works, and how this bidding strategy can help you get more value out of your Ad
Grants account. Let’s go over some terminology up front
– the CPA in target CPA bidding stands for Cost Per Acquisition, and acquisition is just
another word for conversion As you might guess from the name, Target CPA
bidding is best suited for Grantees who want to get more conversions at a specific cost
per conversion, And this bidding strategy will be most helpful
for campaigns that are tracking meaningful conversions – actions like donations, newsletter
sign-ups, views of a thank you page, or significant time spent on your website. Target CPA is a bit more advanced than maximize
conversions bidding, and will work best for campaigns that have a significant amount of
conversion volume. Ideally you’re already getting around 30
conversions per month before you enable Target CPA. Otherwise, maximize conversions might be a better
fit. Target CPA bidding allows you to exceed the
$2 Ad Grants bid cap, and harnesses the power of Google machine learning to dynamically
adjust bids for each user based on the likelihood that a user will convert. And Google Ads keeps the average cost per
conversion at the Target CPA value that you set based on how much a conversion is worth
to you. For example, if you choose a target CPA of
$10, Google Ads will automatically set your cost-per-click bids to try to get you as many
conversions as possible, as long as they average out to a cost of $10 each. Let’s use the example of a hypothetical
nonprofit called ABC Dog Shelter to explain how this works. Let’s say the dog shelter’s primary goal
is to get users to schedule an appointment to come meet – and potentially adopt – some
of the shelter’s dogs. They would have an Ad Grants campaign focused
on this, with conversion tracking set up to see how many users hit their thank you page
after clicking on an ad and setting up an appointment. If this campaign was averaging 10 appointments
scheduled per week, and 40 per month, but not hitting its daily budget, it would be
an excellent candidate to test target CPA bidding. If each appointment scheduled is worth $20
to the shelter, they should set the target CPA to $20. After enabling target CPA, we would hope to
see an increase in spend and conversions. This is because the dog shelter is now able
to bid above the $2 Ad Grants bid cap, with the highest bids being placed on users that
Google’s machine learning believes are more likely to schedule an appointment, based on
the dog shelter’s historical account data. To evaluate whether target CPA is working
well for this campaign, the dog shelter should look at changes in the number of conversions. Don’t get distracted by changes in clicks,
because ultimately what matters most is whether those clicks lead to an appointment being
scheduled. And it’s also important to be patient – it
may take a few days for a user to schedule an appointment after clicking on an ad, and
Google’s machine learning requires some time to learn. Even if the dog shelter only sees 8 appointments
scheduled in the week after target cpa was turned on, for example, they should wait until
they have a full month’s worth of data, and compare that month’s appointment number
to the baseline of 40, in order to evaluate whether this bidding strategy is a good fit. When it comes to the target CPA value, it
is usually necessary to test a few values until you find the right one. If you notice that conversions went down after
implementing target CPA, it may be because a campaign’s target CPA value is a bit too low. In this case, you can try raising the target
CPA value by a few dollars. On the other hand, if you’re consistently
spending your account’s full budget, there may be an opportunity to decrease your target
CPA value by a dollar or two, to find that sweet spot where you are still spending your
full budget, but are getting more conversions at a lower average cost per conversion. Thanks so much for tuning in – we hope this
video was useful. And if you’re ready to give target CPA bidding
a try, you can hop into your campaign’s settings to turn it on.

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