CPA Model Bidding Strategy

CPA (Cost Per Acquisition) a model revolving around the conversion optimizer. The biggest advantage of this model is that the queries triggered for CPA model are considers origin of users, IP of the user, time the query is being executed, location of the user, browser language setting, historical performance of the campaign etc. Ensure the tracking conversion code is always present in the thank you page. Google Adwords system while opted into CPA model delivers the Ads based on its learning. CPA model is a conversion based optimizer and depends on the Conversion numbers. Although the model is CPA the charge for this model is based on CPC.

It is not recommended to switch CPC to CPA and vice versa. Effect of switching the model usually takes eight  hours to behave normally. It is always good to start the CPA model with slightly higher CPA bid and gradually optimize the CPA bid .While making a switch a default CPA bid is recommended, it is only for a reference purpose and should be updated by the advertiser. The CPA model bid is implemented at Adgroup level. There must be 30 Conversion in a month to have the CPC to CPA model bidding feature automatically enabled. It does get enabled automatically. This would mean at least approximately 7 conversion per week. Moreover it will also depend on total number of adgroups present inside the Campaign. The more conversion before enabling the Campaign to CPA model the merrier it is.

Optimal CPA Bid - Last two weeks Cost Per Acquisition should be used to benchmark the data before applying the CPA bid. Ideally, the CPA bid should be around +/-10% of the real CPA. Revisiting CPA on a weekly or twice per week to ensure the CPA bid is still in acceptable range. Always determine the ROI which you are willing to achieve and  calculate the CPA which you are willing to pay.

  • CPA Bid = Total margin per conversion * ROI  you are willing to achieve
  • Average Cost Per Acquisition (CPA) = Average Cost per Click / Conversion Rate
    Remember, seasonality would lead towards price fluctuation and site performance plays a very important role and hence a constant update would be needed while calculating the CPA. Using a factor for adjusting CPA could be done based on learning. At least two weeks are needed to measure the true performance of the CPA model. CPA model is an ideal model and this could be seen as a future for various advertiser. There is no keywords based bidding required but reviewing SQR to improve the Campaign performance. For small advertisers this could be a blessing as they could opt into CPA Campaign and Google would ensure there CPA goal are met without having to worry about the bid for each keyword.

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