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Target CPA strategy applied to campaign level vs. adgroup level?

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# 1
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Hi everyone!

 

So, right now I'm using flexible bid strategies to apply a target CPA to many of my campaigns. I have a question about this..

Does applying a target CPA strategy to an entire campaign mean that the optimizer will try to achieve my target CPA as an average across the campaign? (meaning some ad goups would probably have higher average CPA, and others lower).

 

Pretty sure the answer here is yes, but it leads to my second question which I can't find a definitive answer to:

 

If I instead apply the same target CPA strategy to each adgroup in a campaign seperately, instead of applying it at the campaign level, will Adwords then try to achieve an average of this target CPA in EACH adgroup?

I can see that the first method could result in some adgroups having high CPA and other low.. while the second method might force each adgroup to try and achieve the target CPA. Is this right?

 

Thanks for your help!

 

2 Expert replyverified_user
Marked as Best Answer.
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Accepted by topic author Laura E
September 2015

Re: Target CPA strategy applied to campaign level vs. adgroup level?

Rising Star
# 2
Rising Star
Hi Laura,

I will try my best to help you out here.

So to answer your first question about the Target CPA and how at campaign level it tries to average the same out for all adgroups within the campaign to achieve the targeted CPA. Yes, you are correct in your assumption here.

Now to answer your second question on how if Target CPA is set at Adgroup level then how exactly is it calculated. Here, if you think about it logically, the CPA to be achieved will have nothing to do with other adgroups as each adgroup will have their respective keywords in them and each of those keywords will have a CPA number of their own. So basically, when you set Target CPA at the adgroup level, AdWords will try and average out the CPA's of all the keywords within the adgroup to achieve the Target CPA set at the adgroup level.

Hope this Helps!

Cheers!

Shashank
Cheers,
Shashank Singh, AdWords Rising Star |
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Marked as Best Answer.
Solution
Accepted by topic author Laura E
September 2015

Re: Target CPA strategy applied to campaign level vs. adgroup level?

Top Contributor
# 3
Top Contributor

Hi Laura,

 

I'd certainly recommend moving to a strategy at the Ad Group level if your Groups vary in their CPAs.  As you correctly surmise, if you ask AdWords to optimise across an entire Campaign containing Groups with differing CPAs the results are always going to be something of a compromise.

 

The conversion optimiser is very smart, but it'll find the job easier if you give it more focused targets.

 

Jon

AdWords Top Contributor Google+ Profile | Partner Profile | AdWords Audits

Re: Target CPA strategy applied to campaign level vs. adgroup level?

Follower ✭ ☆ ☆
# 4
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Thank you, both Shashank and Jon!

And thanks Jon for suggesting I move to CPA targeting on the adgroup level. I was thinking the same thing because it seems silly to let some adgroups "get away with" an unprofitable CPA, just because other adgroups are able to achieve one that is lower.

I'm gonna hang out here more often. Smiley Happy

Re: Target CPA strategy applied to campaign level vs. adgroup level?

Rising Star
# 5
Rising Star
Your welcome Laura. Please do post any questions or even suggestions that you may have on the forum here. It will be greatly appreciated.

Cheers!

Shashank
Cheers,
Shashank Singh, AdWords Rising Star |
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Re: Target CPA strategy applied to campaign level vs. adgroup level?

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# 6
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Had to come back to this question, with MORE questions..

I took your advice on applying the target strategy to each adgroup separately. Note that it is the same target CPA strategy that I am applying to each adgroup.

Now, a problem has arisen. After applying the target at the adgroup level instead of the entire campaign, my Cost per Conversion has gone up significantly over the past week. I think the problem is that as a whole my campaign had enough conversion data, but individually there are adgroups that only have a few conversions per month. The system seems to be upping my CPCs in order to acquire more clicks and therefore data.

It seems that target CPA worked better for me when it could pool the data from across ALL adgroups in a campaign. (due to having adgroups with limited conversion data).

I would consider possibly that I just need to give it more time, (it does admit it's still in the "Learning" phase), but I know that many of my adgroups will always remain on the low traffic side (sometimes just a few conversions per month). I wish that I could apply the same target CPA to each adgroup individually, while still getting the system to pool what it knows about device/location/etc. across all adgroups. (originally came here with my question because I didn't want some adgroups to hit undesirable Cost per Conversions)

Should I just go back to a campaign wide approach? What to do?

Re: Target CPA strategy applied to campaign level vs. adgroup level?

Rising Star
# 7
Rising Star
Hi Laura,

I completely understand your predicament here. In my experience when you change a significant settings for your campaign(s), it tends to struggle in terms of performance for the first week or more and it should eventually settle down after it has 'learned' enough of your campaign & has accumulated enough data to start optimizing your adgroup CPA's.

I would recommend you continue with this approach for the next 2 weeks or so, as a fortnight should give you a better perspective on its overall performance and then you can take a call on whether its worth continuing with this approach or should you go back to your campaign level Target CPA.

I would also like to warn you that once you shift back, the campaign would still struggle for sometime and may or may not come back to its original performance. There are trade offs here when you decide to either continue with the approach or not, I recommend you weigh your options properly and take a call only when you are sure that an approach has failed for you.

Hope this Helps!

Cheers!

Shashank
Cheers,
Shashank Singh, AdWords Rising Star |
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Re: Target CPA strategy applied to campaign level vs. adgroup level?

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# 8
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Thanks Shashank,

Do you think that an adgroup with only 2-3 conversions a month can ever do well on an adgroup level target CPA strategy? Could that ever be enough data?

Re: Target CPA strategy applied to campaign level vs. adgroup level?

Rising Star
# 9
Rising Star
Your Welcome Laura,

Now to answer your query, No, I would not recommend you put a Target CPA for an adgroup that has low conversion numbers for its entire lifetime. Generally and this is something that my colleagues have recommended to me lately, that we should ideally use Target CPA strategy only for the adgroups that have enough history i.e., it has recorded enough conversions. In essence, Target CPA & Conversion Optimizer are similar at their core and CO requires that there be a minimum number of conversions recorded in the campaign (15 conversions), as it needs data to understand the best way to push your campaigns performance and get the best out of it. Target CPA does something very similar, which is why I would recommend you use Target CPA only for those adgroups that have recorded enough conversions in the past to give your overall campaign performance/numbers a better chance at improving.

Hope this Makes sense!

Cheers!

Shashank
Cheers,
Shashank Singh, AdWords Rising Star |
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Re: Target CPA strategy applied to campaign level vs. adgroup level?

Top Contributor
# 10
Top Contributor

Hi Laura, if you're only getting 2 -3 conversions per month then no, CPA will not be effective.  In fact, with conversion rates that low, no automated strategy is going to work well, the data simply isn't there to make intelligent decisions.  Personally I don't like to use CPA unless I can see at least 10 conversions a week at the Ad Group level.


Sorry, I should have asked what your conversion figures were before advising you, I assumed they were higher.

 

In your situation I'd be using Manual CPC, probably controlled by scripts for Ad position, and would be looking to increase the number of conversions by examining other aspects of the Account and the website itself.  For example, examining geographical performance, looking at the user path through the website, abandoned carts, etc.

 

Jon

AdWords Top Contributor Google+ Profile | Partner Profile | AdWords Audits