I have been running a campaign with the bidding method set to target CPA. The target CPA was set to $22 per conversion. However over the past 6 months the average cost/conv was over $35.
This happened to many of the campaigns set to Target CPA - the cost/conv. was way higher than the set bid.
Does google look at the Target CPA or just uses the budget to control the costs on the campaign and let it run as they see fit?
Target CPA is a machine learning algorithm that adjusts the bid (CPC) to meet the desired CPA, based on your campaign performances.
My recommendation: For the system to perform well, have about 100 conversions during the last 30 days. (Triple Google's recommendation)
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Changing the bidding from Manual CPC to Target CPA will impact the overall CPC.
Keep it running for some days. It may stable. It is in the learning phase. Post then it will start optimizing the campaigns.
I would recommend you to go through the below article for more information.
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I loved Max CPA bidding - It worked, and there were many benefits. Then Google decided to get rid of it in favor of target CPA, which never worked as well. Over the past couple of months I have gone away from target CPA for the very reasons you outline here @Devora K. You can keep trying to make it work, but CPA bidding just ain't what it used to be.