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Answers to Frequently Asked Questions about Time to Payback CAC
Your target CPA or CPA target (or cost per install/cost per in-app action for app campaigns) refers to the average amount you’d like to pay for a conversion or paying customer. The target CPA set by you may influence the number of conversions you get. A target CPA calculator will give you an overall idea of how much you are spending and where you may need to increase or reduce spends to acquire customers/conversions.
When it comes to online ads, Google rules the roost. And the target CPA or CPA target is Google Ads’ Smart Bidding strategy that sets bids to help marketers get as many conversions as possible at the target CPA you have set: or, the ideal amount you would like to spend, to acquire a new customer.
It involves advanced machine learning to optimise bids automatically and offers auction-time bidding capabilities that customise bids for every auction.
So, when a potential customer runs a Google search that fits the product or service you offer, Google Ads uses your CPA target to set a bid based on the auction’s likelihood to convert. (Auction = the process that happens with each Google search to decide which ads will appear for that specific search, and in which order.)
First, the basics:
CPA, or cost per acquisition = Total ad costs / Total number of conversions.
When you calculate target CPA, you should keep in mind that Google optimises data to get as many conversions as possible within the goal you have set for the cost per acquisition. For example,if you set your CPA target as $50, Google will optimise to get as many conversions that have a CPA of $50 or less. But – this does not guarantee that your CPA is going to stay exactly at $50 since there are other factors involved that could influence that number. This is why a target CPA calculator helps.
Our target CPA calculator is crafted by marketers and for marketers. Whether you are trying to plan out your whole digital marketing strategy or focus on a single campaign, the target CPA calculator will make things a whole lot easier for you. You can calculate target CPA, and leave room for simple adjustments for pace and scalability. Plus, our target cost per acquisition calculator is easy to use and 100% free.