Updated on 3/24/2021
Target CPA is one of several automated bidding tools Google has launched in recent years. The technology automatically adjusts bids so that retailers can achieve a pre-set Cost-Per-Acquisition (CPA). Google’s goal is to streamline as much of the advertising management as possible, but retailers still have questions around whether a set-it-and-forget-it approach can achieve their unique and often complex marketing goals.
In this installment of Keeping Up With Google, a series that informs our readers on the latest changes to Google Ads, we’ll explore what Target CPA is and how it can impact retailers’ performance marketing strategies.
Release Date:
First known as “Conversion Optimizer,” which launched in 2007, Target CPA was re-released as a smart bidding tool in 2013, alongside Target ROAS and Maximize Bids. More recently, Google announced that beginning in April 2021, Target CPA and Target ROAS are folding into Maximize Conversions and Maximize Conversions Value, respectively. Google has not stated when tCPA and tROAS will be retired, though it is expected to occur in the next several months.
What It Does:
Target CPA is a bidding tool that aims to capture as many conversions as possible at a set CPA. Google automates CPC bidding in order to capture conversions at the retailer’s defined threshold. Retailers can set Target CPA for ad groups, individual campaigns, or across multiple campaigns within Google Ads.
The April 2021 merge does not mean tCPA is going away completely. Rather, a tCPA threshold will serve as an optional setting in the Maximize Conversions bidding strategy. The change is expected to roll out gradually to more accounts over time.
Which Channels:
Target CPA is available in the Search and Display networks. It is not available for Google Shopping.
What Does It Mean for Your Business:
Target CPA is another Google automated bid feature that provides advertisers a more hands off approach to their account management. By setting a Target CPA, marketers allow Google to set the spend thresholds for individual auctions and automate bid management. Often retailers who are new to Google Ads and unsure how to build a channel strategy turn to bidding tools like Target CPA for a set-it-and-forget-it solution.
According to Google, the switch will not cause any changes in bidding behavior. If you are currently running Google search campaigns, here are a few recommendations:
- Hold off switching all current tCPA campaigns to Max Conversions to avoid any negative performance changes
- Experiment with only a few campaigns once you can apply a tCPA threshold
- Use the same tCPA and tROAS targets for the new thresholds for Max Conversions and Max Conversions Value
Retailers do not typically use CPA targets as their goal of choice because of the dynamic nature of pricing and desire for profitability. Revenue typically needs to play some role in the equation. CPA could be used in some cases for new customer acquisition or for lead generation.
It’s important to note that Target CPA is not an ideal solution for retailers looking to grow revenue on Google Ads. The main limitations are that retailers have no control over bids, they don’t have insight into the specific bids being set, and bids are only managed to one goal, which is CPA.
Managing to static goals like Target CPA can limit retailers’ ability to grow their business. The most successful retailers regularly adjust their strategy as seasonality shifts or changes in their business occur, which Google cannot necessarily track within its platform at this time. Regularly assessing and adjusting goals on Google Ads helps retailers deliver their ads to the right consumers at the most efficient cost.
For retailers who are solely focused on new customer acquisition, this may be an effective Google Ads strategy and can fuel retargeting efforts throughout the year.
