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What happens when I change a CPA target bid?

Follower ✭ ✭ ☆
# 1
Follower ✭ ✭ ☆

I have a client who's all CPA target bids.  I tried once to up the bids on one of the adgroups, hoping for more conversions.  Instead, I got fewer, more expensive conversions. 


If I lower the bids, does that mean I'll get more, less expensive conversion?  Yes, I'm being facetious, but what is everyone's experience with this?  What can I expect?







1 Expert replyverified_user

Re: What happens when I change a CPA target bid?

Participant ✭ ✭ ✭
# 2
Participant ✭ ✭ ✭
Hi Phil

As per my experience lowering the CPA bid will result in less number of conversion, can't say about the cost per conversion as it may decrease or increase. The reason behind the less number of conversions is decrease in number of impressions thus resulting less clicks.

Whenever you set a CPA bid, Google calculates how much your CPCs should be in order to achieve that CPA as per your conversion rate history.

For e.g. if you are getting conversion rate of 2%, and you set CPA bid for $50 then Google calculates how much CPCs should be to get $50 cost per conversion. Like in this example your CPC should be $1. If you lower the CPA bid to $40 then Google will lower your CPC to achieve the desired CPA.

Lowering the Cost per click will result in lower ad positions which may result in less click as well as missing some potential impressions.

I hope this will help you to clear your doubt.


Re: What happens when I change a CPA target bid?

Top Contributor
# 3
Top Contributor
Hello, Phil.

Please bear in mind that apart from bids, budgets also play a large role in determining the number of auctions your ads enter and the position they are allocated.

If you raised bids and left budget untouched, the system entered some more "risky" auctions and some converted at a higher CPA, but it may have been unable to enter as many auctions as before, due to budget constraints.

Lowering target CPA, on the other hand, will make the system act more conservatively and it may skip riskier auctions.

What you can do is to check you impression share metric, before and after the changes. If your impression share decreased after raising the target CPA bids, you may need to raise the budget as well, not just the bids.

Ideally, the target CPA should be set at a level which is profitable for you and the budget should be large enough to give you an impression share as close to 100% as possible.

Calin Sandici, AdWords Top Contributor | Find me on: Google+ | Twitter | LinkedIn | myBlog
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