Speaker 1: What's up everyone, welcome to the Surfside PPC YouTube channel. Today I want to go over a little bit about target CPA and target return on ad spend. The two bidding strategies that you can use in Google ads. They're smart bidding strategies to actually help you drive conversions or conversion value. So they may also be referred to as maximize conversions and maximize conversion value. So what we're going to be doing today is let's open up an existing search campaign that I'm running and we come over here to settings and what you could do at any time when you're running your campaign is change your bid strategy. So I just want you to keep in mind that if you set a certain bid strategy during your campaign creation, just come over here to set your settings and you can come to bidding and change your bid strategy at any time. Now you'll see target CPA here and you're also going to see if I do maximize conversion value, you can set a target return on ad spend. So in order to run the target CPA or target return on ad spend bidding strategies, what you need to do is set either maximize conversions. So with maximize conversions, you set a target cost per action. And with maximize conversion value, you can set a target return on ad spend. So the only reason you should use target return on ad spend is if you're actually bringing a value in with your conversion tracking. So when I come over here to tools and settings, we're going to come here to measurement and conversions. So if we open up our conversion page, we're going to click on continue. You can see right here that my default conversion. So the main conversion that I optimize for are affiliate clicks on my website. I have no way to actually track the value of every affiliate click after someone clicks. So someone clicks, goes off to an affiliate, I lose that tracking. So all I can track is the link. So every time someone clicks on that link, I count it as a one conversion and the value is just considered $1 in Google ads. So what you can do with your conversion tracking is let's just say I know, for example, every single affiliate click that I send is worth $10. I can say, use the value from my Google analytics for property, or just use the same value for each conversion. So let's just say, for example, you're a business. You had 500 people book appointments last year. You know that those 500 bookings led to a certain amount of revenue. You can use that value and say, let's just say every single booking is worth $100 for your business. Then use the same value for each conversion, set it to $100. So the reason you would want to do that and click on save, now I'm not going to do that in this case because then it's going to count all of mine as 100. But the reason you would want to do that is because you can actually track your revenue and tie that back to your campaign. So if you can actually pull in a value in Google ads when you're using your conversion tracking, now obviously if you're running a Shopify type website or any type of e-commerce website, you can pull in your conversion value for every single purchase. So you're not counting every single conversion as one. You're actually counting every single conversion based on the value it drove for your business in terms of revenue. So if someone goes to your website and purchases $1,000 worth of products, you can actually pull in that revenue dynamically. Now there's plenty of guides for how to do that with Shopify and a lot of the other large e-commerce providers. But what you want to do is you can also incorporate a value if you're able to say, okay, every single affiliate click for my website is worth $10, I click on save. Now what I can do when I'm setting up my bidding strategy, so if we come over here to tools and settings and we scroll down here to shared library and we go to bid strategies. So I'd like to go over bidding a lot because I think it's one of the main things that people get confused with because it can be a little confusing when you first get started with Google ads. But what you can do with bid strategies is you can create a portfolio bid strategy and apply it to your campaign. So using the same example I did before, you could see here if you go to portfolio bid strategies, they have target CPA, they have target return on ad spend, maximize clicks, maximize conversions, maximize conversion value. Now if I click on maximize conversion value here, you can still set a target return on ad spend. So if we come back to our bid strategies page and we click on the plus sign again here, what you're going to see is target CPA, target return on ad spend essentially means the same thing as maximize conversions and maximize conversion value. The main thing is with target CPA or target return on ad spend, you're actually setting a target that you would like your campaign to achieve. So if I go to maximize conversions and I don't set any target, then that just means I'm telling Google ads, I want you to drive as many conversions as possible for my campaign. And it's the same exact thing if we come over here and we do maximize conversion value. You're just telling Google ads, I'm not going to set a target return on ad spend. I want you to drive the highest return on ad spend for me as possible. Now what you can do is obviously set your target CPA, target return on ad spend to make sure you're driving, you're running campaigns profitably. So if I set a target return on ad spend and we use the example from before where every single conversion is worth $10 for my business, let's say I need to make sure my target return on ad spend from my Google ads campaigns is a minimum of 250% or better just for me to break even, then I can set that as my target return on ad spend. You can also come in here to advanced options and set minimum and maximum bid limits. Now this works for search campaigns. It doesn't work for display only campaigns. So keep that in mind if you do apply these to your campaigns. But if we're talking about target return on ad spend, this is really the best bidding strategy in Google ads because you can actually incorporate a value for every single key action on your website. If every single appointment is worth something, if every single phone call is worth something, if you can actually dynamically pull in the purchase value, you want to make sure you're doing that so then you can actually tie back your revenue in terms of your ad spend and make sure that you're running campaigns profitably again. So we can select campaigns here. You choose a campaign from the list. So let's just apply it to this campaign right here. We click on done and now I'm using a target return on ad spend bid strategy for that campaign and I can also set bid limits as well. If I want to make sure I'm not spending more than let's say $3 per click in Google ads, I can set a maximum bid limit of $3 to make sure I keep my cost per click slightly lower as well. Now Google will probably not recommend you set maximum and minimum bid limits. They'd rather you leave it wide open so they can test and make sure you're entering more ad auctions where you may spend $5 for one click, $3 for the next, $1 for the next, $6 for the next. So if you're setting maximum bid limits, obviously that's going to cut out some of those different opportunities. So keep that in mind. If you are testing, you may just want to leave this wide open, set a target return on ad spend and you can always increase this over time. You can always change your bid strategies, but I just wanted to quickly go over some of the differences between target CPA and target return on ad spend. If you're not actually pulling in a value for your conversions, then use target CPA and what you're trying to do is set the amount that you would like to drive each conversion at or less. So what that means is, again, using my example of $10 for each affiliate click on my website, then what that would mean is for my target CPA, I would want to make sure this is definitely less than $10 and let's just say maybe I set it at $3.50 to get started. So every single conversion, I'm paying $3.50 to Google ads. It's driving $10 to my business. Obviously if we're doing this over and over and over again, we can make a lot of money in a given day, given month, given year. So that's target CPA. You're actually bidding for the amount you would like to spend per conversion on your website. So hopefully that makes sense. Target cost per action. The target cost per conversion that you would like to actually achieve. Now, again, target return on ad spend. Same thing except the actual revenue that you would like to achieve in terms of your total ad spend. So hopefully that makes sense as far as target CPA and target return on ad spend. Now if you're running campaigns, okay, let's come back over here and let's go to create a new campaign just to quickly go over the bidding strategies one more time. So choosing your objective, if you're using target CPA or target return on ad spend, you should be in the sales or leads objective because the goal for you is to drive conversions. Now there's certain campaign types where if you choose leads, you may not able to actually drive conversion value. So you want to make sure you know what type of conversion you're driving. In my case, I can choose leads or sales here. So let's just say we choose sales. The conversion goal. So my main conversion goal here is purchases. So we're going to remove outbound clicks, we're going to remove submit lead forms. So we have, this is our main conversion goal. We click on continue and let's just say we want to run a display campaign. So we're running a display campaign. We have our campaign name, everything set up. We can start a new campaign and then as we go through our campaign settings, you're going to see budget and bidding. So what we can do is come over here to bidding and it's going to say, what do you want to focus on? So it's either conversions. So that's if you're counting every single conversion as one or conversion value if you actually have a value tied in with your conversion. So if you select conversions, it's going to say automatically maximize conversions, which would be the maximize conversions bidding strategy. Once you click set a target cost per action, then you're using the target CPA bidding strategy and you can set your target CPA here and you're going to be paying for interactions. So the other thing that we can do is what do we want to focus on? Conversion value, set a target return on ad spend, set your return on ad spend here, click on next and that's how you use either target return on ad spend or target CPA. You can also choose to use maximize conversions or maximize conversion value if you just use these and don't set a target CPA or a target return on ad spend. Last but not least, when you are setting a target cost per action, your goal is to get this number as low as possible. If I start at $3.50, my goal is to get this, let's say to $3 and then maybe to $2.50. So over time, what you want to do is drive more and more conversions. You want to make your campaign run more optimally so that you can drive your conversion actions at the lowest cost possible. And obviously it's vice versa with conversion value. What you want to do is maximize the total target return on ad spend. So if I start at 250% for example, I want to get this double to 500%. I want to get 500% increase. So the higher the percentage here, the lower the target cost per action. That means that you're driving more conversions and more conversion value for your business. So choose the right bidding strategy for you. If you are using values for your conversion, then focus on conversion value, set a target return on ad spend and see if you can get this as high as possible. If every single conversion counts as one, then focus on conversions and set a target cost per action, get this as low as possible. That's everything today. If you have any questions, please leave them in the comment section. Thanks for watching my video today and make sure you subscribe to the Surfside PPC YouTube channel.