Target CPA vs Target ROAS - choosing the right bidding strategy

Target CPA tells Google to try to get as many conversions as possible at or below your target cost per acquisition. Target ROAS tells Google to optimise for a specific return on ad spend - revenue divided by cost. Both use the same underlying machine learning infrastructure. The difference is in what they are optimising for - and that has real implications for where your money goes.

When to use Target CPA

Target CPA works best when all your conversions have roughly equal value. Lead generation businesses are the obvious case - a form submission is a form submission, and you want to get as many as possible below a cost threshold. Service businesses where the value of a lead does not vary dramatically are also good candidates. If you are running a legal services campaign where every enquiry is potentially worth several thousand pounds and you want maximum enquiry volume within a cost constraint, Target CPA is the right choice.

It also works well when you are building volume in a new campaign. Set a realistic CPA target based on your historical performance and let the algorithm find as much volume as it can within that constraint.

When to use Target ROAS

Target ROAS is designed for businesses where conversion value varies - primarily ecommerce. If a customer buying a £10 product and a customer buying a £500 product are both recorded as conversions but you bid equally for both, you are almost certainly overpaying for low-value conversions and underbidding for high-value ones. Target ROAS adjusts bids based on predicted conversion value, so it bids more aggressively for users Google thinks are likely to spend more.

This requires accurate revenue values to be passed with each conversion. If your revenue tracking is missing or inaccurate, Target ROAS will optimise for the wrong thing. Fix tracking first.

Data requirements for both

Smart bidding strategies need conversion data to learn. Google recommends at least 30 conversions in the last 30 days for Target CPA, and at least 50 conversions with values for Target ROAS. Below these thresholds, the algorithm does not have enough signal to optimise reliably. In low-volume accounts, Maximise Conversions or Maximise Conversion Value without targets is often a better starting point - it gives the algorithm more freedom while it builds data.

Setting realistic targets

Do not set a Target CPA or ROAS target that is dramatically better than your current performance. If your actual CPA is £80, setting a target of £40 will constrain the algorithm severely and result in very low volume. Start at or close to your current average performance and adjust gradually once the campaign has enough data. The algorithm needs room to operate.