AdWords
1.8K members online now
1.8K members online now
Improve your AdWords performance and boost your ROI, CTR, and Quality Score
Guide Me
star_border
Reply

Result of setting a CPA that is "too low"

Follower ✭ ✭ ☆
# 1
Follower ✭ ✭ ☆

Hello,

I am wondering whether I should raise the target CPA of a campaign. It is set currently at $1.20 and the actual CPA is $1.40.

My doubt is whether reducing the CPA has chances of bringing the actual CPA further down, or if instead the algorithm will not be able to meet my demands and leave my campaign worse. The goal is to lower the cost of acquisition (or increase ROI) while maitaining, to the extent it is possible, the volume of conversions.

 

I know that testing is the best way to be sure, but maybe your insights can guide me.

 

Thank you so much!

Kind regards,

Arturo.

Re: Result of setting a CPA that is "too low"

Collaborator ✭ ☆ ☆
# 2
Collaborator ✭ ☆ ☆

@Arturo P

 

I'm not sure which way you are trying to go on the bid. Your first sentence asks if you should raise it, and then third sentence talks about reducing it.


Based on the info you have provided, if you lower the CPA bid further I believe you'll find that the volume of conversions will drop.  Raising the CPA bid should increase the volume of conversions provided your budget allows for it.

 

As you've already stated, testing is the best way to determine.

Marked as Best Answer.
Solution
Accepted by topic author Arturo P
July 2016

Re: Result of setting a CPA that is "too low"

Badged Google Partner
# 3
Badged Google Partner
CPA bidding takes time and conversion volume to really work. You have to keep the conversion volume up, especially when you first make the transition.

One of the things to consider is that because the bids are all set at the adgroup level, it's important to maintain like performing terms in the same adgroup. The theme of the KW's in the adgroup is performance. Remove any under-performing terms and place them in another adgroup (or pause/remove all together). Once all the KW's in the adgroup have similar historical CPA's/KPI's, then set that adgroups CPA bid to the historical average CPA of that adgroup, and see what you get.

If you see the avg. pos., impressions, click, and impression share increase - For the same CPA, at the same conversion rate - Then you know where the ceiling is for those terms. If the CPA at the maximum conversion volume is too high, then try reducing the bid down to a profitable CPA. Maximize volume first to give the Google machine all the conversion data you can ASAP. Then work on the margins. For the adgroups that don't perform, reduce their CPA, or pause/remove them from the campaign.
Tom

Re: Result of setting a CPA that is "too low"

Follower ✭ ✭ ☆
# 4
Follower ✭ ✭ ☆
Hi David, thanks for the reply.
Yes my question is actually about both raising or lowering the CPA. I would like to know what makes more sense for the situation I described. Description to which, I shall add, it has been running for some time now and it has already a big amount of conversions, so lack of data is not really the point. My doubt is rather which path might lead me to accomplish my goal given the situation of a target CPA of 1.20 and an actual CPA of 1.40: lowering the target CPA even further or raising it.

Thanks!