Cost per acquisition (CPA) bidding is an automated bid strategy that sets bids to help get as many conversions as possible at the target cost-per-acquisition (tCPA) that you set. For example, if a business sets a tCPA of $50, the system will automatically adjust bids with the goal of obtaining as many conversions as possible at a cost of $50 or less. This strategy relies on conversion tracking being properly set up within the Google Ads account.
This bidding method allows advertisers to exert more direct control over the cost of acquiring customers, potentially leading to a more predictable and sustainable return on ad spend. By focusing on a specific acquisition cost, businesses can optimize campaigns for profitability and scale their marketing efforts more effectively. The development of automated bidding strategies like tCPA reflects the increasing sophistication of online advertising platforms and their ability to leverage machine learning to optimize campaign performance.