Driving conversions is the ultimate goal of any advertising campaign.
If your conversion rate is firing on all cylinders, you are likely maximizing your Ad spend to produce the best results possible — and are right on track to reach the revenue goals you set out for your business.
Which is why determining the right bid strategy for your account is such a crucial aspect of your success. On any given day, it could mean the difference between scaling with ease and burning your budget away just to get piss poor results.
And when it comes to bidding for conversions…there are no bigger players than Target CPA & Maximize Conversions. Both different in practice, but equally significant at the time of delivering consistent ROAS for your business (when utilized accordingly.)
And in today’s article, we’ll give you a dive deep into both. So you can better assess which one fits your specific goals best.
Let us begin.
Target CPA or Target Cost Per Action is a bidding strategy that consists of getting as many conversions as possible based on a specific “target” or price point you set. Which is a fancy way to say that 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 $20 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 chunk of data and large budgets at their disposal — but more of this in a bit.
Maximize conversions, on the other hand, 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.
Now, definitions out of the way, let’s jump into a more practical example.
“Let’s Say I Wanted To Run Campaigns With A Brand New Account: Which Bidding Type Should I Go For?”
The answer will depend on plenty of variables.
But regardless, since we’re talking about a new account, we would feel more inclined to start off with the max conversion 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.
Now, let's say you start off with Target CPA as the bidding strategy for this new account. \
With no context/data at your disposal… how do you plan to know which is the right bidding amount for this audience? (Remember, with Target CPA, Google will only spend as much money as you tell it to bid for). You would need to keep track of your account 24/7 and gradually increase the bid every hour or so until you reach a “sweet spot.”
But even then… how do you know when you start to overbid?
With no data, you can easily fall on the trap of bidding less than you need (which wouldn’t allow you to test your campaigns properly…) or just flat out overbid and flush money down the drain.
This is why we usually recommend Target CPA for established accounts with plenty of data and their bidding all dialed in. Of course, it is possible to start off with target CPA and hit it right on the head the first time…
But so is throwing darts at a target with your eyes closed. Possible — but is it the most effective way to go about it?
Now, when you start off with max conversions, on the other hand…
You don’t have to concern about choosing the right bidding for your campaigns (since Google will take of that work you.) You just select a budget you’d like to kick off with (quite small it needn’t be that big) and hit play.
Let’s say you have 5 campaigns and want to spend a total of $100. If you select max conversions… do you know what’s going to happen?
Right, you guessed it. It will spend it ALL.
Unlike target CPA (where Google will only spend as much as the spending limit you set) with Max Conversions you can count on the fact that these campaigns will spend — and probably double than what you initially budgeted.
Now, this is great. Because 1) Google is going to ensure to give you the best shot at landing conversions, and 2) this will give you a ballpark of how much it costs you do land a conversion on average on your specific budget.
AKA — you’re collecting valuable data about your audience you can later use to scale.
(Quick note: if you’re going to go with this approach, do understand that you may spend an entire Ad budget on a single campaign. So be patient.
Give it around 2-3 days for the strategy to kick in — and I guarantee it will spend. If it doesn’t… then you might be dealing with a really small audience. In which case I would suggest you aimed for a broader crowd… but that’s a topic for another day.)
So in summary:
Maximize conversion can indeed offer you more starting out since you don’t have to deal with the hassle of handling your bid manually. Something that you should avoid when you still don’t have a great idea on how to bid for an account.
Also, max conversions allows you to make the most out of your tight budget. You can begin with a small amount, spend it all, and validate whether or not your audience can spend. What a great way to gather up data, ain’t it?
That’s about right.
But now, to be fair… 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.
Because think about it: you are burning ALL your budget away after all. Every. Single. Time.
It’s tough to scale like this.
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.
Start off with Max Conversions on a moderate budget (say… $20/campaign for 4 campaigns.)
You’re going to start to ramp up those conversions until you get around 100 of them (perhaps less if you’re selling a higher-ticket item.)
And once you reach the 100 conversion mark, and have started to spend a good chunk of change profitably (which should happen relatively fast… you should get to this point about 10-20 days in…)
If you check your bidding history, you should now have a sense of the ideal bidding that will get your account to perform well for this audience.
Once you’ve found your “sweet spot”, you want to duplicate these exact campaigns and test them out as target CPA with this bid that worked for you.
What you’re basically doing here is trying to manipulate the variables and get more control over the pricing and bidding of your account.
Which in turn, will allow you to:
And here’s the kicker: if it works… you’ll be able to spend/bid just enough for you to maintain these conversions and land a return on your investment.
This is how you scale.
Leveraging max conversions to gather data, and then using target CPA’s long-lasting bidding cycle to scale to the moon.
That’s the business.
If you’re looking for more information on how to carry out these strategy to the tee, make sure to watch this short video made by one of our expert media buyers in Linx Digital.
While we did lay out a blueprint you can use right now to start scaling up your campaigns to the moon…
You might be looking for a more streamlined approach to take your Ad account the next level. So if you’d like to find out more about what we could do to help grow your business with YouTube Ads, jump on a free strategy call with us to discover how we can help you grow!
Here are some more articles for you to use YouTube Ads to grow your business