While setting up ad campaigns, Google provides a bidding strategy that allows bids to be automatically optimized and provides bids for each auction in real-time. This is known as Target CPA bidding. This bidding strategy is designed to achieve the highest number of conversions without going over the target Cost-per-Action (CPA) that has been set.
To keep this process fully automatic while working in real-time, Target CPA bidding uses machine learning to optimize total conversion rates while staying within the set Target CPA budget. Using the goals of your marketing campaign, you can customize your target CPA settings to match.
Any historical data from your campaign and any contextual signals are also considered at the time of each auction. These auctions are held each time an ad is needed on a Search Engine Results Page (SERP) or website, and what is shown is determined by the auction results.
Target CPA is the average amount you would like to pay for each conversion. Google Ads can provide a recommendation for your Target CPA as long as there is prior conversion data for your campaign. Setting a realistic budget is important, as setting a Target CPA that is too low can limit total reach and conversions.
The bids placed can vary from being higher to lower than your set target amount, but are designed to keep the total cost close to the target amount.
Average Target CPA
Average Target CPA Includes the weighted average CPA that your bid strategy is optimized for. This includes the average of any device bid adjustments, ad group target CPAs, and any changes that were previously made to your Target CPA.
Bid limits can be set for both the maximum and minimum amount. The maximum bid limit prevents bids from exceeding the set amount for any keywords, ad groups, or campaigns that utilize Target CPA bidding. The minimum bid limit sets the minimum amount you want Google Ads to use for any campaigns or ad groups utilizing your Target CPA strategy.
Setting bid limits isn’t recommended, as it can prevent Google Ads from optimizing and adjusting bids to meet your Target CPA.
Device Bid Adjustments
Device bid adjustments allow conversions to be prioritized based on the device type, including desktop computers, tablets, and mobile phones. These device types can then be targeted at a higher priority or excluded completely to best reach your target audience.
When a Target CPA bid adjustment is set, it does not modify your original bid, but instead adjusts your Target CPA.
Pay for Conversions
As opposed to setting up a bidding strategy around the number of clicks an ad receives, campaigns can be set up where the cost is based on the total number of conversions received.
When a campaign is set up to pay based on conversions, the amount that is spent daily may exceed daily budgets, but will not exceed monthly budgets.
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