Executives at a small e-commerce company are debating Google Ads performance metrics. If the budget is unlimited as long as return on investment (ROI) is positive, which recommendation best positions the company for maximum profit?
- Determine whether the campaigns are profitable, then test different target cost-per-acquisition (CPA) bid increases to see which maximizes total profit
- Ad spend should always be 7% of revenue, which should be used as the target ROI
- Decrease the target cost-per-acquisition (CPA) for the campaigns from US$15 to US$10 to drive an increase in profit per customer
- The company’s email campaigns are the most profitable, with a cost-per-acquisition of US$15, so it should use that as a benchmark when setting target cost-per-acquisition (CPA) bids
Explanation:
If your main advertising goal is getting conversions (like sales, signups, or mobile app downloads), then Target CPA bidding can help automatically get more conversions for your budget. It can also help you get more sales while paying less for the clicks that lead to those purchases.
