One of the central premises is the idea that sometimes marketers need to bid higher and spend more to make more. If the goal is to maximize profits, then an effective bidding strategy shouldn't be tied to a budget or cost per acquisition (CPA). For example, would you prefer an $80 CPA or a $90 CPA? The answer should be “it depends.” Perhaps the higher priced ad appears at the top of a search results page, bringing in more sales volume than the less expensive CPA unit. This would be a case where spending more means making more. The point is to stay completely focused on profit, and follow the consumers’ lead. They’ll show you what to bid for and when.
The Volume / Efficiency Trade-off
Example CPA versus Total Profit AnalysisThink with Google.
Posted by Matt Lawson, Director, Performance Ads Marketing