Google Adwords Conversion Optimizer Now Allows Target CPA Bidding

I just now noticed the following message in one of my Google Adwords accounts:
Target CPA Bidding

Target CPA Bidding

Clicking to learn more about Target CPA bidding produced the following Google Adwords help page:

With the Bid Type advanced option, you can select the method that suits you best when setting your Conversion Optimizer bids.

Max CPA
With this option, which was previously the only option offered with Conversion Optimizer, you set bids using a Max CPA. This amount represents the most you would want to pay for any individual conversion. The way a Max CPA bid works is similar to the way a maximum CPC bid works. If you set a maximum CPA bid of $5, for example, the actual average CPA is likely to be somewhat less, such as $3. Likewise, a maximum CPC bid of $0.50 may result in an average CPC of $0.30.

Target CPA
This new option allows you to bid based on the average amount you would like to pay for a conversion. For example, if you want to achieve an average CPA of $25, you could use this option and set your bid to be $25. Advertisers with CPA targets they would like to reach may prefer to use Target CPA so they can specify those goals directly.

To change your bid type to Target CPA, please follow these instructions:

  1. Select the Settings tab from within your Campaigns tab.
  2. Under the “Bidding and budget” section, click “Edit” to change your bidding option.
  3. Select the “Target CPA” option and click “Save” to finish.
Although I haven’t yet bested my own performance using Conversion Optimizer, allowing Target CPA bidding should help those Adwords Advertisers who are using it to better manage their acquisition costs.
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