How to Set Target CPA Bidding & Tips to Optimize It

Cost efficiency is one of the main challenges in advertising on Google Ads. Sometimes, advertisers feel that the target audience is right on target, but the cost per conversion is still high. Are you experiencing this too? 

One solution is to use target CPA bidding, an automated strategy that allows Google to adjust bids to make conversion costs more efficient. Find a complete guide to its implementation and optimization tips in this article!

What Is CPA in Google Ads?

CPA (Cost per Acquisition) is an advertising payment model in Google Ads that focuses on conversions, not just ad views or clicks. This means that advertisers only pay when a user takes a valuable action, such as filling out a form, signing up for a newsletter, or buying a product.

The cost of advertising on Google Ads uses a bidding strategy, which is the process of determining the bid or maximum amount you are willing to pay to get a certain result.

Then Google will use these bids in the ad auction process to determine which ads will be shown to users. In practice, advertisers can choose from two bidding methods to achieve efficient CPA, which include manual bidding or smart bidding.

Manual bidding can be selected if you want to set your own bid per click according to your strategy and budget. Meanwhile, smart bidding allows Google Ads to automatically adjust bids in each ad auction, based on performance data, user context, and chances of conversion.

Later, this article will discuss more about one of the strategies in smart bidding in detail, namely, target CPA bidding. But first, understand the description below to understand when the cost per acquisition is needed.

Read also: Combining Paid Ads Strategy with SEO PPC Management

When Is CPA in Google Ads CPA Needed?

You can use a CPA strategy when the main goal of your campaign is to get conversions, such as product purchases, customer leads, or app downloads.

This strategy is also effective when you want to optimize your cost per conversion and already have a specific target cost per action (CPA), such as IDR 30,000 per signup.

For optimal results, your approach needs to be data-driven. This is because Google Ads uses a smart bidding algorithm that requires quite a lot of historical data to determine the best bid in each ad auction. 

Therefore, cost per acquisition will be more effective if applied to campaigns with high conversion volume and stable performance data.

Conversely, it is best to avoid testing by dividing the campaign into half and half with other methods. This is because it can disrupt the algorithm's learning process. Let the system access as much data as possible so that it can optimally adjust the bidding strategy. 

When applied correctly, CPA can help to scale up your campaign without overspending, while maximizing the profit from each conversion.

Strategies for Setting Target CPA Bidding

Target CPA is the average amount of money you want to spend to get one conversion. This amount becomes a reference for the Google Ads system in determining bids automatically in each ad auction.

To find out the ideal target CPA amount, you can use the following formula to calculate CPA:

For example, if you spend IDR 2,000,000 to get 20 conversions, the CPA amount is IDR 100,000 per conversion. After knowing the amount of CPA, you can start setting it up in your Google Ads account.

First, log in to your Google Ads account, then select the campaign you want to change the strategy for. After that, go to the “Settings” tab to view the campaign configuration.

Next, click on the “All Settings” section and scroll down until you find the “Bidding Strategy” menu.

In this section, click “Edit,” then select the “Change Bidding Strategy” option to change the bidding method you are using.

From the drop-down menu that appears, select the “Conversion” or “Target CPA” option as your new bidding strategy. Next, enter the target CPA value you want to achieve per conversion.

For example, if you are targeting a cost of IDR 50,000 for each purchase or registration, input that number in the field provided.

Finally, click “Save” to complete the settings. Once this strategy is active, the Google Ads system will begin analyzing historical data and automatically adjusting bids in each ad auction. Thus, the cost per conversion can stay efficient and in line with your target.

Please note that the system requires a learning phase to adjust bids optimally, so initial results may not be stable right away.

Read also: What Is Budgeting Ads and How to Manage It? Check It Out!

Tips for Optimizing Target CPA Bidding

After learning how to set up target CPA bidding, you can also apply the following tips to get the best results:

• Set a realistic target CPA: When the target CPA is too low, it will make Google struggle to find an audience that fits that cost. As a result, ads may not be able to appear or spending may completely stop. It is better to use historical data as a reference for setting a realistic target.
• Let the campaign collect data: The Google Ads system uses a machine learning algorithm that needs time to learn conversion patterns and bid adjustments. So, do not change campaign amounts or settings immediately, or even too often. It is best to wait 1–2 weeks for the algorithm to be more stable.
• Adjust your CPA target gradually: If you want to increase or decrease your CPA target, it is better to do so slowly, for example, by only 10%–25% at a time. The goal is to keep the algorithm stable and not lose the learning data that has been collected.
• Keep monitoring your Search Impression Share metrics: Search impression share shows how often your ads appear compared to the total number of times they could have appeared. You can increase your target CPA by about 10%, then see if your ads start showing up more often.
• Adjust bids based on device: Even though the target CPA is automatic, you can still adjust bids based on device. For example, if you increase bids on mobile devices by 30%, the system will optimize performance so that the CPA on mobile can increase to that amount. So, it is not the click price that will be increased directly.

Not Sure How to Determine & Set Target CPA Bidding? cmlabs Is Here!

If you are having difficulties or confusion when setting target CPA bidding, no worries! Because you can use the SEM Service by cmlabs.

Through this service, the cmlabs team is ready to help you set target CPA bidding with data-driven strategies, focused on your goals, involving in-depth customer and keyword research. 

Not only does cmlabs ensure the strategy is on target, but the team will also guarantee that the ad content displayed is attractive and shows high-quality landing pages. We are ready to help you set responsive and mobile-friendly landing pages that are relevant to your products to get the best results.

The service does not stop even when your campaign is displayed. The cmlabs team will actively monitor and perform the necessary testing and optimization. 

We have helped several well-known brands to maximize their advertising strategies on Google Ads, including JEC Eye Hospitals & Clinic. We handle everything end-to-end, from providing visual elements and copywriting to developing the SEM strategy.

Now it is your brand's turn to run a systematic and effective SEM campaign with cmlabs. Want to know more about this service? Feel free to contact us and get the best offer for your brand!

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