In the ever-changing, ever-evolving world of Google, changes are not all that surprising. However, Google still manages to take people off-guard with some variation or another.
The latest one in the line being, conversion-based bidding called “Pay-For-Conversions” available for display campaigns.
Why Should You Know About This?
If you are an advertiser, basing your strategies on Google’s functioning, then this is important information. With the bidding functionality now available, advertisers will be charged when users convert from ads.
This move is similar to Google’s search campaigns. Advertisers that want to pay by conversion rates would set for themselves a target Cost Per Acquisition or CPA that needs to be acquired in the bidding section of the campaign settings. To further clarify how this works, Google graced its confused audiences with an example.
“Let’s say your target CPA is $10, and you drove 30 conversions over the weekend. You’ll pay exactly $300, with an actual CPA of $10.” Further, they said, “you’ll never pay above your target Cost Per Action.”
Google, therefore, is trying to put it out that Pay-For-Conversions will use the same functionality (in algorithmic terms) as that of Click-based payment. This hints towards the goal which is to garner as many conversions as possible by the desired target threshold.
For Those of You Who Are Still Wondering What Target CPA Is
Formerly known as Conversion Optimizer, Target CPA bidding is an automated bidding strategy provided by Google Adwords. Target CPA optimises your bids so that you get the most conversions for your target CPA, which you set as a goal.
Let’s put it this way, say you found out through intensive research and experience that you can pay up to $2 to gain a customer, and still have margins left to cover your costs, so you would then choose a target CPA of $2 and Google will then deploy algorithms to get you the best bids to reach that goal.
Some Additional Information on Target CPA
• Target CPA is a lucrative option for high volume campaigns like the ones which promote products or services with identical margins.
• The upper limit on a target CPA is $200.
• In case you happen to get an error while trying to pay for conversions, then your account would be disqualified for “undisclosed reasons.” For added authenticity, Google says that eligibility is refreshed on a daily basis.
• What advertisers need to keep in mind is that Pay-For-Conversions don’t work on conversions imported from calls or Salesforce. They also do not work for cross-device conversions or shared budgets.
• There also happens to be an option called Smart Display Campaign, which offers pay conversions. Campaigns need to at least reach 50 conversions in the course of 30 days to be eligible for the Smart Display Campaign (which is basically an advertising solution to handle variables so as to acquire a larger customer base.
Now that we have all the details about this update, advertisers need to make sure to set a target Cost Per Acquisition. This will help to make sure that the update works in their favour and they can make the most out of this new update announced by Google.