Solved: Target CPA in Google Ads—Market Dictated or Not?

Hi there,

Thanks for reaching out! I'm happy to give you some initial thoughts and guidance on your Google Ads target CPA question.

It's a common issue and one that many advertisers grapple with. There's definitely no easy answer but I think I can help. Let's get into some of the nitty gritty...

We'll need to look at the market...

You're right, the market is a massive factor. If everyone else is aggressively bidding, or if there's some major industry event causing spikes, your CPA will naturally be affected. Think of it like trying to buy petrol when there's a fuel shortage – prices rocket no matter how carefully you plan your journey.

But here's the thing: you're not totally at the mercy of the market. There's a difference between accepting the market's baseline and actively fighting to be *better* than that baseline. It's like saying you can't control the weather but you can choose to carry an umbrella.

Here's what I mean:

Even if your competitors are driving up costs, you can still improve your ad relevance, landing page experience, and overall quality score. This basically means making sure your ads are super targeted, super relevant to the keywords, and lead people to a landing page that is equally relevant and easy to use. Google rewards this with lower costs and better ad positions.

I remember one software client in the B2B space who was struggling with high CPAs. We took a step back and really honed in on long-tail keywords – super specific searches that indicated a high level of intent. We re-wrote the ad copy to perfectly match those keywords, and made sure the landing page was laser-focused on the specific problem the user was trying to solve. The result? We halved their CPA within a couple of months, even though the overall market was still competitive.

You mentioned you've got the basics covered (negative keywords, ad copy, keyword research) which is great. So, let's move on to the next level...

I'd say you should assess Google's learning...

Target CPA (tCPA) can be a powerful tool, but it's not a magic bullet. It's more like a sophisticated autopilot system that needs good data to work effectively. If you're just starting a campaign, or if you've made major changes (new keywords, new ad copy, new landing page), Google needs time to learn. The algorithm needs data to understand which clicks are most likely to convert, and how much to bid for those clicks.

If you set a tCPA too early, or if you're constantly tweaking things, you're essentially tying the autopilot's hands behind its back. It can't learn effectively, and it might start restricting your traffic to avoid exceeding your target. This could mean missing out on potentially valuable clicks that would have converted if given the chance.

Think of it this way:

Imagine training a puppy. You can't expect it to perform complex tricks on day one. You need to give it time to learn the basics, provide consistent feedback, and gradually increase the difficulty. tCPA is similar – you need to give Google enough data to learn the ropes before expecting it to hit your target consistently.

Here's what I suggest:

If you've made significant changes recently, give the campaign at least a week or two to stabilize. Monitor the performance closely. If you're consistently getting conversions *below* your target CPA, you might be able to lower it gradually. But if you're struggling to get any conversions at all, your target might be too restrictive. Consider loosening it slightly to give Google more breathing room.

You probably should experiment with different bidding strategies...

tCPA isn't the only bidding strategy in Google Ads. It's just one tool in the box. There are other options like Maximize Conversions, Maximize Conversion Value, and even manual bidding. Each has its own strengths and weaknesses, and the best one for you will depend on your specific goals, budget, and data availability.

Here's a quick rundown:

• Maximize Conversions: Google will try to get you as many conversions as possible within your budget, without any CPA target. This can be good for generating volume, but it might not be the most cost-effective option.
• Maximize Conversion Value: Similar to Maximize Conversions, but it focuses on generating the highest *value* conversions. This is useful if some conversions are worth more than others (e.g., high-value products or services).
• Manual Bidding: You have complete control over your bids. This requires more effort and expertise, but it can be very effective if you know what you're doing.

I'd recommend testing different strategies to see what works best for you.

You could, for example, run a Maximize Conversions campaign alongside your tCPA campaign for a week or two and compare the results. Or you could try switching to manual bidding and experimenting with different bid adjustments for different keywords, locations, or devices.

Don't be afraid to step outside of your comfort zone and try something new. You might be surprised at what you discover.

You'll need to closely check your audience targeting...

Who are you trying to reach with your ads? Are you targeting the right people? This might seem obvious, but it's surprising how often advertisers overlook this fundamental aspect of their campaigns.

If you're targeting a broad audience, you might be wasting money on clicks from people who are unlikely to convert. On the other hand, if you're targeting too narrow an audience, you might be missing out on potential customers.

Consider these points:

• Demographics: Are you targeting the right age group, gender, and location?
• Interests: Are you targeting people who are genuinely interested in your products or services?
• Behaviors: Are you targeting people who have a history of buying similar products or services?
• Remarketing: Are you retargeting people who have visited your website or interacted with your ads?

Don't be afraid to experiment with different audience targeting options.

You could try creating custom audiences based on your website visitors, customer lists, or even offline data. Or you could try using Google's Similar Audiences feature to find people who are similar to your existing customers.

The more targeted your audience, the more likely you are to get conversions at a reasonable CPA.

I've detailed my main recommendations for you below:

I hope these initial thoughts have been helpful. Advertising is a tricky business and optimising a campaign can be tricky. I really do think following these steps will help though.

If you want to take your Google Ads performance to the next level, you might consider getting some expert help. We've helped loads of businesses, including SaaS firms, reduce their CPA and increase their ROI. For example, we helped one software client get 3,543 users at £0.96 cost per user using Google Ads. We could run a full audit of your account and provide you with a bespoke strategy tailored to your specific business goals and market conditions.

Plus, we offer a free initial consultation where we can review your strategy and account together. It gives potential clients a taste of the expertise they'll see going into their project if they decide to work with us. No pressure, just a chance to get some free advice.

Regards,
Team @ Lukas Holschuh