Continuing from the last item (Target Outranking Share) in Atria’s series about automatic bid strategies, this week we will discuss the Target Cost-Per-Acquisition (CPA) strategy.
Unlike many of the other strategies we have discussed, this one will require some planning and preparation before it can bring a single campaign or company portfolio into prime time. Grab an overview of what other options lie in wait, and let’s get started with this mission of acquisition.
What is Target CPA?
This strategy uses historical information about your campaigns to determine the best bid for your advertisements in order to grab you as many conversions as possible.
You can set your desired CPA and then allow AdWords to do the heavy lifting. AdWords will adjust its bids to reflect your price, say $15 per acquisition, and calculate how it can best leverage a Google user’s device or location to get your advertisement on the front page while also remaining within your overall budget.
Why Should I Use This Strategy?
This strategy works best when you have a firm grasp of the target amount of spend you want to allocate to acquisitions. If your budget is so fine-tuned that you know how much money you have available per potential customer, Target CPA may fit well. This strategy works best when it aligns itself with the needs of a business, but it can be difficult to determine exactly how much a company should spend to gain a customer’s purchase. Target CPA will match your inputs; you just need to be sure that the return you get by allocating, for instance, $10 or $15 per acquisition, will allow your bottom line to benefit from that amount of spending.
You will want to turn away if you don’t have a clear vision of where you have been and where you want to be. The planning and preparation mentioned earlier refers to AdWords’ requirement in Target CPA that you already track conversion data in your account, that your campaigns that seek Target CPA have received at least 15 conversions in the past 30 days, and that those campaigns have received similar conversion rates for that past several days. Your campaigns must be consistent and provide you with enough background data for AdWords to make proper future judgments.
How Should I Get Started?
Assuming you meet all the criteria listed just above, you will need to set your target acquisition spend. A price too low could cause you to miss out on some opportunities. A price too high, though, could burn through your budget like it’s celluloid film.
Like other strategies, you can set a maximum and minimum for your price, but AdWords doesn’t recommend that tactic because it will limit the Target CPA strategy from optimizing your bid at various times of day and for different types of customers. Target CPA, no matter the bid it sets in any individual instance, will try to average all bids so it meets your target spend.
The only other setting you should tackle is whether or not you want this strategy to focus on the Conversions bid metric, which measures the total number of conversions that result from a single click, or Converted Clicks, which only registers one conversion per click on an advertisement. Target CPA defaults to Conversions, but you can change the setting in your dashboard.
Check with Atria for any assistance you might need in setting up this strategy. Stay tuned for future parts of this series. Ready to upgrade your adwords managment plan? Contact Atria today!