For Demand Gen target cost-per-action campaigns in learning phase, we may apply a cost adjustment if it will help improve performance over time. This feature retroactively adjusts cost based on conversion volume and aims to keep your cost-per-action (CPA) closer to the target CPA you set.
This article explains the benefits, functionality, eligibility criteria and reporting details for the feature.
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Benefits
- Supports the learning phase for new campaigns: During the initial stage of a new campaign, performance can vary while the system collects conversion data. The performance-based cost adjustment may adjust costs downward if your actual conversion rate is lower than the predicted conversion rate to allow your campaign to better calibrate in its initial stage.
- Enhanced target achievement: The performance-based cost adjustment system optimises your campaign by working to bring the delivered CPA closer to your desired target. Performance may vary given various factors like changes to your website, changes to your campaign setup or changes in the market.
How the performance-based cost adjustment works
For tCPA campaigns, some conversions may cost more than your target and some may cost less, but Google Ads will try to keep your cost per conversion equal to the target CPA that you set. These changes in CPA take place because your actual CPA depends on multiple factors, like changes to your website or ads. Your actual conversion rate can be lower or higher than the predicted conversion rate.
The performance-based cost adjustment feature addresses potential variability in conversion predictions when conversion information is more limited and seeks to help you achieve more consistent CPA delivery by retroactively adjusting costs based on ad performance in eligible Demand Gen tCPA campaigns. Costs may be adjusted downward if a campaign receives fewer conversions than the predicted target during the learning phase.
Availability and eligibility
Eligibility is based on a multitude of factors, including, for example, the authenticity of your account activity and the age of your account. Eligibility is also limited to advertisers who consistently follow best practices for conversion tracking and bid and budgets, and these factors may be subject to change. While compliance with baseline requirements is necessary for eligibility, it does not guarantee application of the feature.
It is possible that the cost adjustment will only be applied to certain campaigns or on specific days:
- The performance-based cost adjustment for eligible Demand Gen tCPA campaigns will be automatically activated no more than 5 days after your campaign has started.
- The cost adjustment remains in effect for up to 3 weeks, or until your account or campaign reaches its designated duration or cost adjustment limit.
Reporting
The performance-based cost adjustment feature works seamlessly in the background to align your campaign's final cost with its performance.
Your cost reporting will reflect the final cost that you will be responsible for after any automatic adjustments have been applied. These adjustments can take up to 5 days to be reflected in your cost reporting after your campaign has started. There are no separate line items, credits or notifications for these adjustments. For example, if your campaign received fewer conversions than expected, the system may automatically adjust your final cost to account for it.
