Google has announced the availability of conversion-based bidding for display campaigns called “Pay for conversions”.
Why you should care
With the new bidding options, advertisers are charged when users convert from the ads rather than for ad clicks or impressions.
Similar to Google search campaigns, advertisers that want to pay by conversion set a Target CPA (cost per acquisition) in the Bidding section of campaign settings. In an example of how the pricing works, Google offered, “Let’s say your target CPA is $10, and you drove 30 conversions over the weekend. You’ll pay exactly $300, with an actual CPA of $10.”
Pay for conversions uses the same bidding algorithm as click-based payment. Google says, “you’ll never pay above your target cost per action.” The goal is to generate as many conversions as possible at that target threshold.
Your account must have more than 100 conversions in the past 30 days to be eligible for pay for conversions. Additionally, the time between click and conversion must be shorter than 7 days for at least 90 percent of those conversions. To see your conversion lag time data in the Google Ads UI, segment data from the past 30 days or more by Conversions > Days to conversion.
More on Target CPA bidding
- Target CPA bidding is most appropriate for relatively high volume campaigns promoting products or services with similar margins. The upper limit on Target CPA is $200.
- If you get an error while trying to use pay for conversions, your account may be ineligible for “undisclosed reasons.” Google says eligibility is refreshed daily.
- Pay for conversions does not work for conversions imported from calls or Salesforce or for cross-device conversions. It also doesn’t work with shared budgets.
- There is also an option to use Smart Display campaigns with pay for conversions. Campaigns need to reach 50 conversions in a 30-day period to be eligible for Smart Display campaigns.