Target CPA Vs Maximize Conversions: Which One Should You Use?

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A lightyear ago in the world of technology, 2016 to be precise, Google rolled out Smart Bidding to ads platform. Smart Bidding enabled an advertising to set a conversion event within the ads platform and let Google get to work finding users that would achieve the conversion event.

In the 6 years since then, Smart Bidding has became more powerful.

Initially Max Conversions and Target CPA were two separate bid strategies. Today however, they are semi-combined, where as you set a campaign up for max conversions and then have the option to set a Target CPA.

Should you utilize just Max Conversions or apply a Target CPA? I’ll share with you what I do.

The post below curates a few of the videos I’ve done on this subject.

My Experience With Google Ads

I’ve been running Google Pay-Per-Click since 2009 when I launched an e-commerce business. These days I run PPC ads to generate leads for my local businesses, along with leads that are generated for large scale lead buyers in financial products / services markets. My total monthly adspend on Google is excess of $100,000 and….

all of my campaigns are using Target CPA.

Why? Well when using Target CPA google ads will get conversions at your Target COST PER ACTION. Consider I know that a conversion has a value of $50, I can set a target of $25 for the campaign (or ad group) to achieve a 50% margin, and then I can set my budget to $10,000 per day. This is basically instant scale, the beauty of paid advertising.

If I were to simply set the budget to up to $10,000 per day, Google would spend the budget but the conversion cost would likely be way higher than $25. You can see this at play on a smaller level in this test I did here:

It’s important to note that when using the Target CPA and setting a high budget, you usually won’t even come close to spending the entire daily budget.

Does Target CPA actually stick to the target cost amount?

Many people wonder if they set a $25 Target CPA for example, if the campaign will actually stick to that.

It will. I rely on it with many campaign set at high budgets. However it is important to note, that day to day performance can vary wildly. Some days my cost per conversion will be way higher than average. Over a 7 day period, it is usually pretty close to the target, and over a 30 day period it is pretty much right on target.

Making Target CPA work starts with Max Conversions.

Here’s where the two come together! You cannot just set up a new campaign, with a Target CPA and let it rip.

Usually what will happen is for a few days the campaign will spend excessively, and then just stop running.

Instead my rule of thumb is to start with a small budget, increasing it upward as the campaign shows traction, and then after I have gotten 50 conversions, apply a Target CPA. I’ll usually set my TCPA on the high side, and let it run for a week or so and then slowly move it down to my desired target.

This may mean losing some money up front, but that is what it takes to make things work!

Here’s a video I did for someone that need some help getting TCPA to work explaining the process.

Alternative To Target CPA For E-commerce.

Use and quantification of Target CPA is primarily applicable to conversion events that have a static value, or that are applied to an offline transaction and cannot be directly quantified (only averaged). Most of my work falls in this realm. I generate leads, and sell products through a funnel. If you’re running an e-commerce store with many products a user could purchase TARGET ROAS would be the best bid strategy for you!

About the Author

I have been in the 'online business' space since 2009 when I started an eCommerce business selling motorcycle parts (sold in 2012). Since then I have owned and operated several successful online business (and had a fair share of failures), along with owning offline home services businesses. Currently my focus is online businesses that are profitable with paid traffic. As a 'self employed individual' I do not use Linkedin, but you can connect with my on my personal instagram and youtube which largely revolve around my mountain biking passion!