Should you use Target CPA bidding in Google Ads?

You've got questions about Target CPA bidding, and in episode 71 of the Inside Google Ads podcast, host Jyll Saskin Gales has answers! She clarifies the differences between Maximize Conversions and Target CPA bid strategies, offering insights into when and why you might consider switching. Jyll also advises whether to start new campaigns with Target CPA or not, and if it's necessary to change to Target CPA if Maximize Conversions is already performing well. She also debunks myths about bid strategy statuses, and whether or not you need to worry about the "learning period."

Plus, stay tuned 'til the end of the episode for a new Insider Challenge!

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Transcript

Should you use Target CPA bidding in Google Ads?

Target CPA is one of four Smart Bidding Strategies in Google Ads, which means it's powered by AI and takes a ton of signals into account to determine the right bid for each and every user every time you serve an ad.

We're going to cover the differences between Maximize Conversions and Target CPA, whether you need a CPA, and how to know if your Smart Bidding strategy is still learning. 

I'm your host, Jyll Saskin Gales. I spent six years working for big brands at Google, and now I work for you.  

This is Inside Google Ads, Episode 71: Target CPA.

Our first question comes from Veshko on YouTube and they say, have you tried to start a campaign with Max Conversions and tCPA from the beginning to see if it works with the high tCPA?

You know that I love to start new campaigns on Maximize Conversions, but I will generally advise you not to start a new campaign with a Target CPA or tCPA.

Why? 

Well, you don't know what you don't know. For a new campaign, you don't know what the actual CPA will be or should be.

Of course you have a goal in mind when you launch your campaign, but it's unknown whether or not that's an achievable goal.

The risk is setting a Target CPA that's too restrictive so your campaign never gets its feet off the ground. It never gets a chance and it's dead on arrival and you say Google Ads didn't work when you were the problem.

Now, two things I want to mention here. 

First, are there exceptions? Of course. For example, let's say you have a Performance Max campaign running successfully on Target CPA with multiple asset groups, and you decide to take one of your asset groups into its own campaign. Okay, that's a new Performance Max campaign, but I would feel comfortable starting that on Target CPA. I would still set my target 10% to 15% higher than what my actual CPA was for that asset group because it's still a new campaign. It's going to have to learn all over again. But assuming we're using the same conversion actions and we have sufficient conversion volume, that learning should happen pretty quickly. I just want to give it a little bit of wiggle room to get through that initial learning, which is why I recommend setting a slightly higher target than what you might actually want, at least in the beginning. 

The second thing I want to mention, because I was asked this recently, is that choosing a Target CPA bid strategy is the same thing as choosing Maximize Conversions with an optional Target CPA. Two different ways to get there in the Google Ads interface, but it's the same bid strategy. There is only one CPA-based bid strategy in Google Ads.

Our second question comes from telco100 on TikTok and they say, if my Max Conversions campaign is working well and I don't want to scale, do I need to change to Target CPA? 

No, you do not need to add a Target CPA. My general advice is that if you're looking to scale your campaign, meaning you're looking to grow your campaign, you're going to want to set a Target CPA or Target ROAS rather than staying on a maximize bid strategy, like Maximize Conversions or Maximize Conversion Value.

This is because of how maximize bid strategies work, which is fundamentally different to how target bid strategies work. On a maximize bid strategy, when you increase your budget, it will in turn increase your bids. And that could cause problems for you if you're looking to increase your budget by 20%, 50%, and 100%. Your bids could skyrocket. So before you make any big budget changes to a Maximize Conversions campaign, especially if it's a budget increase, you'll probably want to set a Target CPA first to help stabilize your results and you can set that target at or near your current 30-day CPA.

But do you need to do that? No! If Maximize Conversions is working well for you and you have no budget changes planned and things are humming along nicely, then by all means leave it alone. If it ain't broke, don't fix it.

By the way, if you're still feeling a little stuck about which bid strategy to use or any other issue or challenge in your Google Ads account, you can book a call with me. I've helped optimize more than 10,000 Google Ads accounts in my career, so whether you're a beginner, intermediate, or advanced Google Ads user, I am confident I can help you achieve your goals.

You can book a Google Ads coaching call with me via my website, jyll.ca, that's J-Y-L-L dot C-A, or follow the link in the episode description.

Our final question today comes from Manan911 on YouTube, and they say, I recently ran a campaign and it said, "Eligible learning new bid strategy, Google Ads is optimizing your new bid strategy. Performance may improve further. No action is needed at this time. Five days left for learning." So is my campaign running or is it pending for five days?

Manan, your campaign is running. And also this notification is kind of garbage. 

If you're using a Smart Bidding strategy like Target CPA, your Google Ads campaigns are always learning. I know that Meta Ads practitioners obsess over the learning phase, but there is no set learning phase in Google Ads. Your campaigns are always learning because auction dynamics and user behavior are always changing.

So why does Google give this five-day warning or notification? 

I think it's to encourage you to have a little patience. Smart bidding usually appears like dumb bidding when it first gets started because it's learning from scratch, and too many advertisers freak out and turn off their campaigns rather than giving them a chance to learn.

I have a blog article on my website about what those various bid strategy statuses actually mean. So I'll link that in the description in case you want to learn more about your various bid strategy statuses.

All in all, Target CPA is a great bid strategy to test if you consistently get at least 20 to 30 conversions a month and your conversions are binary, meaning a conversion either happened or didn't happen. They're all worth the same to your business, like a phone call, a lead, a booking, a newsletter sign up, et cetera.

For low conversion volume accounts or accounts with widely varying conversion values, CPA bidding may not be the right choice for you at this time.

Today's Insider Challenge is this. Let's say that Telco100 is your client, our second question from the episode. Maximize Conversions bidding, things are going well, no appetite to grow. You just want to keep things steady. For challenge purposes, let's say the campaign is a Search campaign that averages 20 conversions a month, and it's been doing so for six months. Do you set a Target CPA? Why or why not? 

The beauty of the insider challenge is there's no right or wrong answer. Just an opportunity to stretch your brain on real life Google Ads problem solving.

Last Episode's Challenge, Episode 70, was this. Let's say you work with a business that operates in a sensitive interest category. That means you can't use any of your data segments, you can't use Lookalike segments, and you can't use Custom segments or Custom interests. What that leaves for you is Google's audiences and optimized targeting. So what do you do? Do you run Demand Gen with these more limited audience capabilities? Or do you just stick with Search? 

If it's a small budget advertiser, I'm probably sticking with Search, but let's say Search demand is low or there's some other reason that we definitely want to or need to expand beyond Search. What would I do?

I would run a Demand Gen campaign, even with the limited audience targeting capabilities. Assuming we have robust conversion tracking and conversion data, I would use Optimized Targeting because this is going to try to find people who are most likely to convert. It's sort of like a Lookalike segment based on your converters.

Now again, this will only work if I have robust full funnel conversion data and lots of it, like 50 to 100 conversions a month at least. If not, turning on optimized targeting is more likely to light my money on fire.

So if it's a lower conversion volume account or one that just tracks leads and I’m perhaps worried about spam leads, I would run Demand Gen still, but maybe on a clicks rather than a conversions-based bid strategy. 

And I would focus all my effort on the creative. I call this creative-led targeting. And while I would leverage a handful of Google audiences that seem most relevant, I would really be relying on that creative to appeal to my target audience and not appeal to my not-target audience. I would actually try to really lean into Video here so that I could build a YouTube remarketing segment, which I could then use as a layer on top of my Search campaigns. This means I could really broaden my keyword targeting in Search or even use fancy keywordless targeting if I'm narrowing my audience to only reach people who have engaged with my YouTube video via my Demand Gen campaign.

I know that can be a little confusing to wrap your head around. That's a version of a strategy called RLSA, Remarketing Lists for Search Ads. And you can learn more about that on my blog. I'll drop that link in the episode description for you as well.

Would you do the same thing or something different? 

I'm Jyll Saskin Gales and I'll see you next time Inside Google Ads.