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ROAS vs. Target CPA

Visitor ✭ ✭ ✭
# 1
Visitor ✭ ✭ ✭

Hey Everyone - Would love some feedback / opinions on this. Traditionally, most of the campaigns we run are flipped over to a target CPA once we've optimized the campaigns down to our desired CPA while running on an enhanced CPC. 

 

Do you think there is a major difference (possible benefits or pitfalls) for using a ROAS bidding model while assigning a fixed cost for each conversion vs. just using the target CPA model? 

 

On the surface, it seems like both bidding models are trying to achieve the same thing at the end of the day. One is going after a specific CPA, while the other is trying to achieve ROAS but is essentially going after a CPA once they calculate what CPA is needed to arrive at the ROAS goal.

 

Any opinions are greatly appreciated. 

ROAS vs. Target CPA

Visitor ✭ ✭ ✭
# 2
Visitor ✭ ✭ ✭

We always use focus on ROAS. The products we sell can range anywhere from $30 - $3,000+ with an avg price of $750. Our margins mean we'll gladly pay a $225 CPA on a $750 sale but that's just not practical if we're selling a $30 item. If you don't have a large variance in your product prices CPA is probably fine. ROAS works better for us though because of the huge range of prices. 

 

 

ROAS vs. Target CPA

Badged Google Partner
# 3
Badged Google Partner

You have to be careful with ROAS bidding. Unless you have very accurate return values in AdWords, the system won't know how much revenue you are actually generating.

 

For example: If you use analytics ecommerce data to track return, analytics can track the source for a longer duration than AdWords. Any revenue coming in past the AdWords conversion window won't be reported in AdWords, and you could end up losing out on long term returning customer revenue.

 

Of course, the same is true for CPA bidding... So, I guess it's a wash either way? Smiley Happy

 

Tom