Kevin Death of CPA

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The Death of Maximum CPA Bidding on Google AdWords: Video

In this episode, Kevin speaks about The Death of Maximum CPA. During the month of January, the maximum CPA feature in Google AdWords is going to be removed and by default will change to target CPA

Welcome to first iProspect TV video of 2014! In this episode, Kevin speaks about The Death of Maximum CPA. During the month of January, the maximum CPA feature in Google AdWords is going to be removed and by default will change to target CPA. It's not all bad news!

Watch the video to allow Kevin explain to you what the difference is between maximum CPA and target CPA and how to set your target CPA up.

Video Transcription

Hello and welcome to the first iProspect TV of 2014. Today we are going to jump straight into it and we are going to talk about a change that is coming up this month in Google AdWords and it is to do with bidding and maximum CPA. So, currently there are a number of ways that you can bid on Google AdWords. The most common one is maximum CPC. That's basically just where you set the maximum bid that you are willing to pay for a click. Another way to bid with Google AdWords is maximum CPA and that's the maximum amount that that you're willing to pay for conversion on your website. That could be a newsletter sign, that could be a sale or any other type of conversion. During January, this feature, maximum CPA is actually going to be removed and you are not going to be able to use it anymore. And instead by default if you're using maximum CPA, it's going to target CPA.

So what's the difference between maximum CPA and target CPA? Well maximum CPA is the maximum you're willing to bid, the idea is that you wouldn't go over that but now target CPA is a bit more flexible. Google might make it a little bit more aggressive in bidding if they think that there's a conversion in it for you. The second way that you can bid is return on ad spend bidding. So rather than setting a target CPA where you're saying you're willing to pay five euros per lead for example. You set a return on ad spend target. And that could be for $1 you spend, you wan't to make $5 back if you have an e-commerce site. So you would set your return on ad spend 500% in that example.

So if you are fed up of managing all of your bids manually with maximum CPCs, using either of these features is a really good way to automate a lot of stuff. So how do you go about setting that up? Well there are a couple of things that you will need.
The first is that you're going to have conversion tracking set up on your website and you can do this in AdWords using the Google AdWords pixel or if you are use Google Analytics, you can pull in the conversions from there. You need to have at least 30 conversions in the last 30 days to be eligible for what's called conversion optimiser and that allows you to use these features. Now once your campaign has had 30 conversions in the last 30 days, you'll see a little note inside Google AdWords that says your campaign is eligible for conversion optimizer.

When you go in and make the change to conversion optimiser and you set up your target CPA, you get asked to set up a recommended target CPA bid. Now Google will tell you what they recommend that should be. And if you pick what they recommend, then you should get more conversions at roughly the same CPA. Now if you want to get more conversions, then you can set a slightly higher recommended target CPA. You're going to spend more money and you're CPA is going to go up if you want more conversions. If you want to actually lower your CPA then you want to set your recommended target CPA bid lower than what Google recommend but you will get less volume and won't get quite as many conversions.

Now, once you've done that you need to monitor, you need to check and you need to make sure that you are getting the results you want. These tools are a great way to help automate some of your account but you still need to keep an eye and manage it. So that's pretty much it for CPA bidding. If you have any questions or comments, please leave them below.

It's quite a complex and interesting topic so if you're wondering about your bids or what the best bid strategy is for your particular business, feel free to reach out. We'll be happy to get back to you and help answer that question. Until next time, we hope you enjoyed the video. Take care and see you again!

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