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Transcript: I Moved from Manual CPC to Target CPA and THIS HAPPENED
By now, you should all know that target CPA could be a great way for you to automate your account and achieve one of two goals. You either want to achieve the same number of conversions you’re getting right now at a lower and consistent cost, or you want to increase the versions you’re generating at the same cost. These are the two things target CPA bid strategies should achieve. The question is does it really work? I’ve covered the bid strategies on the channel before, but what I want to show you is some live data in terms of transitioning from a manual CPC strategy over across to a target CPA strategy.
What happened and why it worked or didn’t work, it’s going to be all reviewed in this video. It was put in place on a campaign that was the perfect candidate for smart bidding. What do you think? Do you think it works or not? Well, you’re about to find out.
Hey guys, Darren Taylor of thebigmarketer.com here and my job is to make you a PPC expert. Now, if you’re new to the channel, I’m a trainer and consultant specializing in PPC and Google Ads. I train tons of people across the UK and over the world and if that sounds of interest to you, you should consider subscribing to the channel. In this video, we’re taking a look at a real example of a target CPA campaign. We’re transitioning a campaign from manual CPC over to target CPA. It’s something Google often tells us advertisers to do because it can achieve better results than a human being but is that always the case?
First of all, as I said, the campaign is a perfect candidate for smart bidding, because of course, you need to achieve at least 30 conversions in your account before you can even consider using smart bidding and expects to get good results. Now, this campaign generates way more conversions than that. In fact, last month it generated around 140 conversions. Generally speaking, yes, last month was a good month for this particular campaign but generally speaking, month on month, it achieves anywhere from 100 to 150 conversions recorded in the account. As you can see, it’s a perfect candidate for smart bidding.
Now the campaign is in the insurance niche so the cost per lead can be quite high because of course the value of sale is pretty good, but the consistency of the cost per conversion is what we’re going to look at next. The CPA in the campaign has consistently been at around £58 per conversion. Of course, when you implement a smart bidding strategy, you want to achieve that same cost per conversion and hopefully increase the number of sales you get, or even achieve a better cost per conversion than you’re getting on manual CPC.
We know the cost per conversion in this campaign on manual CPC is £58. The advertiser is willing to pay the most for a sale is £65. We have a little bit more room to play with in terms of manual CPC, but it will be interesting to show you what smart bidding did to this campaign. Before I continue, of course, this campaign also wasn’t budget restricted because it ran on open budgets. It’s still running on open budgets. Of course, if you’re running a smart bidding campaign without using open budgets, you’re going sort of strict the results so I’m factoring that in as well. This is the perfect candidate for target CPA bidding.
I took Google’s advice in the recommendations tab and they assumed I would get 13 more conversions than I was currently achieving per month at the same cost I was paying, the £58 I was paying for my conversions anyway. That sounded like a good deal to me, but did it work? Well you’re about to find out. Before I go into the results, if you like what you’re hearing so far, smash the like button below and let me know in the comments, have you transitioned successfully from manual CPC over to target CPA bidding? Let me know in the comments. I reply to pretty much every comment I get. Hit me up below.
It’s been 13 days since I ran at target CPA on this campaign that was formerly manual CPC and here’s what happened. The first thing is that it achieved a higher volume of conversions, which is good, of course, because you want more sales, you want more leads and conversions. Looking at the campaign, we achieved a ton of sales in that timeframe. In fact, historically in the campaign when it was on manual CPC, the most conversions in 13 days it ever achieved was 65 conversions. Now, when I moved over to target CPA in that short 13-day period, it already achieved 86 conversions. It sounds pretty positive so far, but I think your opinion is about to change.
As you remember in the video, earlier on I mentioned the target CPA for this particular campaign was £58 that it was achieving and smart bidding was set at the same level. The whole objective is target CPA. What CPA did smart bidding achieve? Well, it absolutely skyrocketed. We’re now paying £79 for a conversion in that 13-day period. It’s easy to see why, because the CPCs in the accounts massively increased in this particular campaign and we’re paying 60% more for our traffic than we did previously. We saw a massive increase in sales, but conversing we saw the CPA go up to unacceptable levels.
Of course, the advertiser can only manage to spend £65 per conversion at absolute maximum and of course, hitting those lofty heights of nearly £80 per conversion is not going to cut it. It’s massively overspent in that period of time and it’s caused a massive increase in our traffic costs and our cost per acquisition when Google promised it will maintain the cost per acquisition and give us more leads as a result as well.
That is a huge, huge problem, especially for a campaign that spent £8,000 last month, where in this 13-day period under this new bidding strategy, it spent nearly £7,000 already. It’s still got two weeks left to go to catch up to even the data I got from the previous month. It’s massively overspending and as I said, it was on open budget so spend wasn’t necessarily a problem as long as the CPA was being achieved. Of course, the CPA is not being achieved. It’s massively, massively inflated to £80 from where it was at £58.
Now I can already hear some of you saying, “Darren 13 days isn’t a huge amount of time for Google to optimize a campaign.” Well, Google themselves claim they can optimize a campaign from learning into running in a seven-day period. Even though they do mention that you should run experiments and tests when moving bidding strategy for a number of weeks, I can’t allow my advertiser to do that. They’ll be throwing money in the bin and giving them money to Google they can’t sustain a cost per conversion £20 higher than what we were paying before. I can’t justify it.
I don’t care if Google says they should test it for three weeks or however long, four weeks, they claim that you can optimize it in seven days. I’ve given them 13 days and everything has skyrocketed in terms of that target CPA. No Google, I’m sorry you’re not getting any more of my money than you need to. Just based on personal experience, I’ve only seen target CPA smart bidding work about 20% or 25% of the time, one in four campaigns, generally speaking.
Now, of course, it’s anecdotal, but I’m only going by what I’ve seen. When it works, it works amazingly well. It makes campaign management really streamlined, very easy, and it can adapt to market conditions and give you a good CPA consistently. When it doesn’t work, you get results like the results I’ve shared with you today, which is a big problem.
You’ve heard from me, but really, I want to hear from you, tell me if you’ve manual CPC over to target CPA. Let me know if you’ve done that before and tell me in the comments what the results were like. I’d be really interested to know. Before you go away, don’t forget to like the video. Don’t forget to check out the other content across my channel and I’ll see you guys on my next video.