To excel in Google Ads, it’s essential to adopt an appropriate bidding strategy. Google offers an extensive array of bidding options designed to help advertisers optimize their campaigns and meet their marketing objectives. Popular strategies include “Target Cost Per Acquisition” (CPA) and “Maximise Conversions,” which are often chosen based on the specific goals of the campaign.
We will explore their methodologies and effectiveness and delve into the critical aspects that define and influence these approaches, offering insights into how they can be best utilized to enhance campaign performance.
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Let’s first give a bit of background for each bidding strategy.
Maximise Conversions
Maximise Conversions excels by leveraging machine learning and algorithms to identify potential conversions and target the right audience
For the accounts without data (starting from scratch), it’s advisable to start with Maximise Conversions and let Google work its magic to secure those conversions for you until you accumulate at least 30 to 40 conversions and then you can transition from Maximise Conversions to Target CPA.
By selecting Maximise Conversions, advertisers allow Google’s algorithms to determine optimal bids for increasing conversions and that’s the biggest difference between these two. With the MC bidding strategy you are not giving specific signals to Google how much you are willing to pay for each conversion but to provide as many conversions for the budget set not depending on cost per acquisition.
As said in the beginning, this bidding strategy is good for testing the waters, gathering conversion data in the account, and building the way for the CPA bidding strategy which is more cost/acquisition oriented which most advertisers are oriented around.
Target CPA
Advertisers can set an ideal Cost Per Acquisition (CPA) using the Target CPA bidding strategy in Google Ads. This feature leverages advanced machine learning algorithms to dynamically adjust bids to meet the advertiser’s specified acquisition cost.
The strength of Target CPA lies in its algorithm’s ability to analyze extensive historical data and patterns of user behavior. This analysis allows it to fine-tune bid amounts automatically, enhancing the chances of hitting the advertiser’s CPA targets consistently. This bidding strategy helps improve the effectiveness of ad campaigns by targeting users more likely to convert at the desired cost level.
Consider adopting the Target CPA bidding strategy if you have a precise cost-per-acquisition goal and aim to maximize conversions while adhering to that cost. This approach is most effective for businesses with sufficient historical data and previous conversions, enabling Google Ads to optimize bids efficiently.
Both Target CPA and Maximise Conversions are robust bidding strategies, but they serve different objectives. Your choice between them should be based on your specific campaign goals and available historical data. Fully understanding the differences and functionalities of these strategies is crucial for managing campaigns in the most efficient and effective way.
Here’s how they act in practice
Maximise Conversions strategy utilizes your budget to secure as many key conversions as possible (leads, purchases, etc). For instance, with a $100 budget, you might achieve 5 conversions at $20 CPA.
Conversely, using Target CPA allows you to specify the amount you’re willing to pay for each conversion. It’s crucial to remember that if your account doesn’t have enough conversion data, Google may find it challenging to meet a CPA of $20, which could result in your budget not being fully utilized if the target CPA is set too low initially.
A strategic approach would be to initially employ the Maximise Conversions setting to accumulate data on how your campaigns perform. After a few weeks, once you have a better understanding of your average conversion cost, you can switch to Target CPA to attempt to lower your costs.
So then, is Target CPA superior to Maximise Conversions?
The choice between Target CPA and Maximise Conversions hinges on your campaign objectives. If you have a definite cost-per-acquisition goal and wish to maintain control over your spending, Target CPA is the preferred option. On the other hand, Maximise Conversions aims to secure the highest number of conversions within your budget though it does not ensure a specific cost per acquisition.
Want to brainstorm with our team on new ways to scale your business with YouTube Ads (and other performance video platforms)?
Join us for a free YouTube ad brainstorming session👇
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Bojan Bovan, Account Manager
With his extensive background in media buying for some of Inceptly's biggest clients, Bojan is known for his inquisitive mind and attention to detail. He keeps his hand on the pulse of new developments in direct-response advertising and enjoys finding ways to apply innovative strategies and techniques to keep our clients ahead of the curve.
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