When running a campaign on Google Ads, it's important to know what bidding strategy to choose.
Bidding Strategy is the approach that determines how much you're willing to pay for clicks on your ads.
Your bidding strategy is one of the factors that determines whether your ad wins an auction and is shown to users.
When a user searches for something on Google or visits a website that shows Google ads, an auction takes place to determine which ads will be displayed.
Google uses a combination of factors, including your bidding strategy, to determine which ad is the most relevant and valuable to the user. The ad with the highest Ad Rank (which is determined by your bidding strategy and other factors like quality score and ad relevance) typically wins the auction and gets displayed to the user.
Target CPA and Target ROAS are two automated biddings that we are discussing in this post. Automated biddings are also called Smart Bidding. You give targets to Google’s algorithms so it determines how much to bid for your keywords.
Target CPA
In Target CPA, you set a target cost for each conversion or acquisition, meaning that you specify the amount you're willing to pay for each conversion, and Google's algorithm will automatically adjust your bids to try to achieve that target.
If your target CPA is too low compared to your competitors, Google might not be able to spend enough money to get conversions. On the other hand, if your target CPA is too high, it might increase your cost per click and therefore make advertising unprofitable for you.
Target ROAS
Target ROAS bidding strategy helps advertisers maximize their revenue by setting a target for their (ROI) from advertising spend.
With Target ROAS, you can tell Google Ads how much revenue you want to generate for each dollar spent on ads, and the system will automatically adjust your bids to help you achieve that target.
In the following video, learn about the difference between Target CPA and Target ROAS bidding strategies in Google Ads, how to calculate them, and when to use each one.
Instructor: Hamid Pasha
Great post