Campaigns with higher conversion rates signify efficiency. When your conversion rate is performing well, it means you’re maximizing your ad spend to drive the most results possible. This is why choosing the right bid strategy for YouTube Ads is so important! Getting this right can make a big difference in your campaigns.
Maximize Conversions and Target CPA are two different bid strategies for YouTube ad campaigns that can help (or limit) your performance. So the question is, which one should you be using? After reading this blog post you’ll have your answer to that question, as well as a more well-rounded understanding of YouTube Ads as a whole. Let’s jump in!
What is maximize conversions bidding
With this bidding strategy, Google automatically set bids on your behalf. Their aim is to get you the most number of conversions based on your budget.
Maximize conversions bidding strategy auto finds an optimal bid for your ad each time it’s eligible to appear. It does this by using historical info about your campaign while evaluating the contextual signals available at auction-time.
If your campaign’s focus is on singular conversion or event taking place that has no other factors that you would consider, then maximize conversions might be for you. Here are some things to keep in mind when using the maximize conversions bid strategy for YouTube Ads:
- It uses advanced machine learning to auto optimize bids and offers auction-time bidding capabilities that tailor bids for every auction.
- Maximize conversions aims to get you the most results possible within your budget.
- You need conversion tracking in place in order to use this bid strategy. This helps optimize the results as compared to when you have zero data or history.
- You should know what keywords to use and make sure they are generating ROI. This will help you save budget.
- When using maximize conversions bidding, we recommend using Google's tools such as budget simulator and impression share metrics to better judge the budget opportunity available for your campaign.
If you are planning to use the maximize conversions bid strategy, make sure you understand that you may spend an entire ad budget solely for a single campaign. It would also be smart to keep your ROI goals (CPI, CPA, and ROAS) in mind, so you understand how this bid strategy is working out for you.
To learn more about maximize conversions, visit this Google Ad’s help page.
What is target CPA bidding
Target CPA (target cost-per-action) is another type of automated bid strategy that sets bids intending to get as many conversions as possible based on your target CPA. This bid strategy is great if your main goal is to get conversions, such as sales, sign-ups, or mobile app downloads.
One of the advantages of using target CPA is that it can be more budget friendly. This is because you’re telling Google how much you’re willing to pay for a conversion on average. For example, let’s say you have a target CPA of $15. Google Ads will auto set your bids to try to get you as many conversions at $15.
So how does target CPA differ from maximize conversions?
Maximize conversions aims to get you as many conversions as possible within your budget. This strategy will try bidding higher in auctions to get more conversions, which could result in your entire budget being spent quickly. On the other hand, target CPA has the tendency to place lower bids when entering an auction as the system takes your target CPA into account. Based on that specific target CPA you’ve set, Google will try to get as many conversions as possible.
Here are a few key points to remember if you decide to use the target CPA bid strategy for YouTube Ads:
- This strategy requires having your conversion tracking enabled. This is to make sure that it's tracking conversions which will then help Google optimize the bidding strategy.
- Having ample conversion volume is very important for Target CPA. However, it is also important to note that conversion history is not required to use either of these two bid strategies.
- Google will throttle the campaign’s performance when it’s not converting (likely due to a low tCPA or low budget).
- Setting bid limits for your Target CPA isn’t recommended by Google. It can restrict Google's optimization of your bid. It can also prevent Google from auto adjusting your bids to an amount that could better meet your target.
To learn more about target CPA, visit this Google Ad’s help page.
What bid strategy does Vireo Video recommend
At Vireo Video we ensure that we’re always at the forefront of testing Google Ad’s new initiatives. So we were pumped to test out target CPA conversion bidding.
The results shown above for one of our clients is a great example of why we love using target CPA at Vireo. You can see just how much of a performance increase our client experienced after switching to target CPA.
We were able to acquire a ~500% increase in conversions. Using the Target CPA bid strategy allowed us to get more cost-efficient conversions, driving our cost/conversions down which also allowed us to get even more conversions because of the budget that was left over compared to before.
Now of course not every example looks like this. And not every campaign will benefit from switching to target CPA. However, in general, we find target CPA to be more cost efficient and effective at driving sustainable and consistent conversions.
In your future campaigns, we advise you start testing the target CPA bid strategy if you haven’t already.
Considerations before switching your bid strategy
Now before you go and switch your bid strategy for YouTube Ads, you need to take a few things into consideration.
Do you have enough data?
Even if Google doesn’t say that there’s a required number of conversions for the target CPA to be effective, it is ideal to have enough data for Google to base it's optimizations off of. Remember that Google Ads uses your target CPA to set a bid based on the auction's likelihood to convert - which means it will look at your campaigns’ historical performance.
Do you have enough budget?
Since the system will try to get you as many conversions within the target CPA you set, it is important to have an ample budget to avoid traffic restrictions.
Do you have enough traffic volume?
If your campaigns using the maximize conversions bid strategy show “limited by budget”, it means that you still have not maximized your campaigns’ reach and there are audiences that still can be targeted. Switching to target CPA will let you reach these audiences in a more cost-effective way.
It is important to note that Google will still consider external factors like auction competition, auction cost, your website’s performance… etc, when bidding. This is why you might see conversions happening at a higher or lower target CPA than the one you set. In a similar manner, setting a very low target CPA can also restrict your campaign’s traffic. If you’re seeing very low traffic after switching to target CPA, you may need to increase the target you’ve set out.
Conclusion
Maximize conversion keeps track of bids and adjusts them in order to maximize results. This strategy can possibly exhaust your budget, but it could also give you the most number of conversions.
Target CPA on the other hand is a strategy that learns about your business over time. The automated bidding can likely save you time and effort in the long run.
They are different strategies that can yield different results. So make sure you know the goals of your campaign and review your results often. Performing A/B testing can also help you gather more data to make informed decisions on which strategy is best for your campaign.
We hope you found this article helpful! If you’re still confused on what bid strategy is right for your campaign, we’re here to help! We specialize in YouTube advertising and want to see your business succeed. Hit the banner below or just click here to book a call with our team today.
