When should you change your target CPA bid in AdWords?

Question: Some of the campaigns are getting leads at well below the Target CPA bids. Should I lower my Target CPA bids? Also, I have other accounts that are also doing well as far as Target CPA, but they are underspending my budget by hundreds. What do I do to get more leads and spend more of the budget?

Answer:

You should lower your CPA bids when –

  • The number of conversions is consistent at least for two weeks
  • When your actual CPA has not crossed your target CPA at least for two weeks

In short, when the campaigns are meeting your expected number of conversions below the target CPA for at least two weeks, you may get ahead to decrease it.

Why two weeks?

There’s no rule as such. In general, that’s the period AdWords needs to adapt its optimization automation strategies to the CPA changes you made.

Then, the number of conversions as well matter here. If your campaigns are getting big numbers in conversions, say 100 days, making changes even in a week time should be fine.

By how much to decrease?

Depends on the difference of your target CPA and actual CPA. For instance, if your target CPA is $25 and the actual is $15. You can lower the target to be around $18 or $20.

However, to be on the safer side, do not decrease it by over 25% to start with.

An important thing to note here, if lowering the CPA affects the conversion volume adversely the next day, do not panic, give it a few days without making frequent changes to the campaign.

To your final question – if your budgets are not being utilized to the full and you are on CPA, you can work with keywords, ad copies, and extensions. Try adding a few new keywords (yes, only a few to start with). You can also expand the target geography as well, but don’t add many at one go. Add one, give it a week, check performance, add more.

The point is, you can make changes, but do not confuse the system by making it in overwhelming numbers.

This answer to this question was requested to me on Quora.
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