Learn the Intricacies of Target vs Max CPA and ROAS Bidding [Video]

By Brad

6 comments

General, PPC Management

Target and Max CPA/ROAS bidding are the most common automated bid solutions used by Google Ads accounts.

There are some subtle differences between how these two systems work that can cause dramatically different results.

In our last SMX Session, one of the sections we covered was target vs CPA bidding. Here’s a 17 minute, highly detailed video, on the differences between the bid methods that examines which you should use based upon your budget, targets, and goals.

Errata & Clarifications:

  • 4 minute mark: Max would not have IS loss where Target would have IS loss. I said it backwards.
  • 5 minute mark: IS loss due to rank is primary quality score or low bids, which is clarified at the 6 minute mark.

We hope you enjoy the video and learn some valuable tips on choosing and managing your bid methods.

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6 Comments

  • Irit

    Hi
    Thank you for this great video.
    If you have enough budget, would you combine two campaigns?
    1. Max – with a lower budget
    2. Target – with a higher budget?

    Thanks
    Irit

    Reply
    • Brad

      Hi,

      That depends on why they are different campaigns. If they are using different keywords to reach different parts of the funnel, one is a very good return and one is average, they target different regions, etc – then no, I would not combine them.

      If they have the same goals, both convert well, target the same regions, and so forth – then yes, I would combine them.

      Hope that helps,
      brad

      Reply
  • Andrew

    Thanks Brad,

    If you are setting up a new search campaign and would like to ultimately use Target CPA or Target ROAS would you first set the bidding setting to “Conversions” without a target CPA?

    I read somewhere a few months back that this is recommended until such time as the campaign is achieving 30 conversions per month – and thereafter switching to Target CPA or Target ROAS as the campaign should already have a reasonable amount of data from which to start refining bids towards the Target cost or return.

    Thank you

    Last time I looked at this the setting in Google was actually called Maximize conversions – now the equivalent seems to simply be “what do you want to focus on? – Conversions – set a target cost per action (optional)

    Reply
    • Brad

      Hi Andrew,

      I usually start with conversions and then switch to target CPA. The exception is very high CPC industries, then I’ll use manual or even portfolio max clicks so I can set a max CPC bid.

      The industry still calls it target CPA, but that is technically retired. You are correct – to enable target CPA, you choose conversions and then the option for setting a target CPA within conversion bidding.

      Reply
  • David

    Hi Brad, thank you so much for the very detailed video.

    I have a campaign that is on target CPA (ex. $30/lead) yet has a lost share impression rank of > 90%.

    I have around 15 conversions per month, so it’s right on the threshold of having enough conversion data.

    Should I rise the target CPA in order to recuperate on the lost impressions, or remove the target CPA (and switching to max conversions) and then try to accumulate as much impressions while monitoring the impact on the CPA ?

    Thank you so much.

    Reply
    • Brad

      Hi David,

      That depends on how flexible you are with CPA.

      If your lost IS is that high, what you could do is one of 3 options:
      1) Lower your CPA. Maybe you can get more conversions per month if you had a lower CPA and therefore, the same budget could acquire more conversions.
      2) Look closely at your Quality Score. If you are running a 5 or lower (7 or higher is ideal), the QS optimization might what you need.
      3) Test out max conversions and see if there are more available at a cheaper CPA (similar to target CPA).

      If you want to raise your budget a lot assuming you get more conversions, target CPA is a better choice to test. If you aren’t going to change your budget at all (and you are spending ~75%+ of it now), then you could test max or target.

      Hope that helps,
      brad

      Reply
  • Leave a comment

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