Overview of CPA Bidding in Adwords

The basics of CPA bidding

CPA bidding is an advanced bidding feature in AdWords. The “CPA” stands for “cost per acquisition”. By “acquisition”, what they really mean is “conversion”. Conversion tracking is a requirement to use CPA bidding. Conversion tracking, of course, is a way of tracking particular actions users might take on your website–after clicking your AdWords ad. For example, a conversion might be a purchase made on your website, the submission of a form, a phone call to your business, or could simply be the view of a particular webpage on your site.

With CPA bidding, you simply assign a dollar amount that you would like to pay for conversions. Once you do this, AdWords will then take over all of your bidding, and will adjust your bids for each auction based on the perceived likelihood of a conversion.

As you can imagine, Google has a tremendous amount of data to draw from. It uses that data to make educated guesses about which auctions are the best for your conversion goals.

Requirements

To use CPA bidding (also known as “Conversion Optimizer”) you need to have conversion tracking enabled in AdWords. This could be done by using the AdWords built-in conversion tracking feature, or can be done by importing goal or transaction data from Google analytics. But either way, it must be set up and configured in AdWords.

Once you have conversion tracking set, you need to accumulate some conversion activity for the AdWords system to learn from. Once you’ve accumulated 15 conversions in a 30 day period, your campaign will be eligible for CPA bidding.

CPA bid types

If you choose to use CPA bidding, you will have two options for setting bids: Setting a “target CPA bid”, or a “maximum CPA bid”.

A “target CPA bid” is the average amount you’d like to pay for a conversion.

A “Maximum CPA bid” is the most you are willing to pay for a conversion.

So it’s your choice–give AdWords the average amount you’d like to pay, or the maximum amount you’d like to pay per conversion. Keep in mind, you can’t expect to get results that strictly adhere to these bids. But the system will attempt to come close.

Key points

When you first set up CPA bidding, AdWords provides a recommended bid. It’s usually best to start with that bid. As time goes on, you can observe and adjust as necessary.

If you’re using CPA bidding, you can no longer apply bid adjustments. Google will completely take over your bidding. There is one exception to this, however, and that is that you can set a mobile bid adjustment to -100%.

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