🤔 Bid strategy dilemma: Target CPA vs. Maximize Conversions—Which wins?

Find out what fits your specific goals best 🎯                                                                                                                                                                                                                                                                                                                                                                                                                 May 02, 2024 | [Read Online]( [fb]( [tw]( [in]( [email](mailto:?subject=Post%20from%20Inceptly&body=%F0%9F%A4%94%20Bid%20Strategy%20Dilemma%3A%20Target%20CPA%20vs.%20Maximize%20Conversions%E2%80%94Which%20Wins%3F%3A%20%0A%0Ahttps%3A%2F%2Finceptly-agency.beehiiv.com%2Fp%2Fbid-strategy-dilemma-target-cpa-vs-maximize-conversionswhich-wins) Driving conversions is the ultimate goal of any advertising campaign. This is why determining the right bid strategy for your account is such a crucial aspect of your success. It could mean the difference between scaling with ease and burning your budget away. Author: Jovan Simic, Account Manager And when it comes to bidding for conversions…there aren’t better options than Target CPA & Maximize Conversions. Both are different in practice, but equally significant at the time of delivering consistent ROAS for your business (when utilized accordingly.) Want to brainstorm with us on new ways to scale your business with YouTube Ads (and other performance video platforms)? Join us for a free YouTube ad brainstorming session here: [👉 Book a call]( In today’s newsletter, we’ll give you a dive deep into both. So you can better assess which one fits your specific goals best. What is the target CPA? Target CPA is a bidding strategy that consists of getting as many conversions as possible based on a specific “target” or price point you set. Google will set bids and try to make the best with the price limit you intended for your account. If you placed a bid for $50 per campaign, it will spend this exact amount (and never go over this mark.) This strategy is generally employed by established accounts with a good amount of data and larger budgets at their disposal. What is the Maximize Conversions bidding type? Maximise Conversions is a strategy that seeks to get you the most conversions based on your entire budget (not your bidding.) Google automatically sets bids on your behalf with the goal to get you as many conversions as your budget can allow. This usually winds up in Google spending your entire budget away in a handful of days, so this strategy is better suited for lower-budgeted businesses looking to get traction on their accounts and see how far their tighter budget can get them. Which bidding type should I go for? First of all, it depends on many variables and on what you are trying to accomplish with your campaigns. Target CPA optimizes bids based on past performance and uses machine learning to hit a target cost per acquisition, whereas Maximize Conversions prioritizes conversion growth above all else. In case you have a new account we would recommend starting with Maximize Conversions bidding type. Why? Because if your account is brand new, it lacks one of the biggest pieces of making this advertising puzzle work for you: data. You need the performance data of your campaign in order to select the proper bid for your specific audience. The main advantage, especially in situations with a limited testing budget, is that you’ll need to spend less on your testing and finding winning creatives and audience segments. You can set up a few campaigns with smaller budgets and start collecting data. Unlike target CPA, with Max Conversions you can count on the fact that these campaigns will spend — and probably double what you initially budgeted. This is great, because: - Google is going to ensure you give you the best shot at landing conversions, and - This will give you a ballpark of how much it costs you to land a conversion on average on your specific budget. Plus, you’re collecting valuable data about your audience you can later use to scale. But, there is one area in which Max Conversions might not be the best option as your bidding strategy. See, since with Max Conversions Google is essentially intending to spend all your budget trying to get your campaigns to convert… it might not be the best option when it comes time to scale up your campaigns efficiently. If you have a specific target cost per acquisition in mind and want control over your spending, Target CPA is the way to go. This strategy works best for businesses that have historical data and conversions they can use, so Google Ads can optimize bids effectively. When you use Target CPA, having enough historical conversions for Google to learn from is key. You need at least 15-30 conversions in the past 30 days to really make Target CPA work. This gives their algorithm the info it needs to optimize bids based on past performance and predict if you’ll get a conversion. So perhaps… The best option is not to choose between one bid strategy or the other but to use BOTH strategies cohesively to achieve maximum performance. Target CPA and Maximize Conversions are both powerful bidding strategies, but they have different purposes. Choosing between them should depend on your specific campaign goals, historical data, and how much control you want over your ad costs. Understanding how these strategies work and differ is key to running successful and cost-effective ad campaigns. Want to brainstorm on Direct Response CREATIVES to scale your winning product across YouTube, YouTube Shorts, TikTok, and other video channels? Go here to set up a free Direct Response Creative Consult with our team: [👉 Book a call]( Jovan Simic, Account Manager Jovan Simić is an experienced media buyer responsible for over $30M in profitable ad spend. At Inceptly, Jovan has collaborated with prominent brands, including Advanced Bionutritionals, Amplify Solar, Fittrack, John Crestani, and The Social Man, demonstrating his versatility and expertise. His deep understanding of media buying and consistent track record of success make him an invaluable asset to the industry. 💌 Like this newsletter? Let's continue the conversation Get in touch with us by responding to this email or tagging us on [LinkedIn]( or [Instagram]( and sharing your thoughts. Your feedback helps us keep our newsletter relevant and interesting. Enjoyed what you read? Don't keep it to yourself! 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