Marketers are buzzing about the potential of Google's Target CPA bidding, which pairs machine-learning and AI to deliver cutting-edge insights and results. It gathers as many conversions as possible at a specific target cost per acquisition, so it's quickly gaining popularity in marketing.

There are two major reasons for that:

• First, Target CPA uses real-time signals, such as browsing history and location, to serve ads. Rumor has it that the technology even accounts for weather trends, the stock market, and IoT devices.
• Second, it conducts auction-level bidding faster than humanly possible. Campaign managers can't bid on every impression at every second of the day, but artificial intelligence makes that a reality.

Google is leading the way in allowing a variety of campaigns to use the Target CPA bidding strategy, and brands are eating it up. After all, advertisers are always trying to find ways to optimize campaigns and hit one of their most important goals: meeting the bottom line.

But marketers must first make sure Target CPA is a strategic fit.

Limited Scalability? A Common Misconception

Many marketers believe that scalability—i.e., spend and efficiency—is limited when using a Target CPA strategy. That is true to some extent, but it's not the whole story.

Google allows your ads to show up only within auctions it deems possible for you to win at a set CPA threshold. That means other auctions you aren't necessarily participating in are removed, limiting your relative spend. However, adjusting the CPA setting to be higher or lower offers variability in spend and gives marketers a bit more control.

You can pull two levers in such a case: increasing or decreasing your CPA targets, and increasing or decreasing your budget thresholds. The former lets you scale your spending, and the latter determines whether you participate in auctions depending on how much you're able to spend in a day.

Think of it this way: If your daily spend budget is too low, you'll be excluded from auctions throughout the day, and you likely won't be available for all of the options you might be eligible for otherwise. But if your CPA setting is too low, you likely won't be able to participate within auctions, and thus won't be able to spend the budget you've allocated.

Your campaign performance will therefore be efficient and effective if you have optimal settings in place.

How to Decide Whether Target CPA Is the Right Fit for You

Target CPA can drive great results for your brand, but it isn't a perfect fit for everyone. It comes with a steep learning curve, and it can cause stress and anxiety for marketing teams because of its continually changing nature. For instance, you might see performance swings of 10-40% in a single day—a roller coaster that isn't for the faint of heart.

Target CPA is best used by brands that have a clear goal in mind: performance-driven brands that often seek to optimize lead generation or e-commerce sales. Those with trackable KPIs do exceptionally well; those that rely on offline KPIs can find it challenging to implement a Target CPA strategy unless those KPIs are entered manually (and frequently) into the system.

Because there is so much to consider, ask yourself the following five questions before embracing Target CPA.

1. Do I want to spend less time making manual bid adjustments and more time focusing on strategy and planning?

If the answer is yes, Target CPA is for you. It enables you to stop manually pulling levers within your campaigns. You no longer have to set keyword bids, dayparts, devices, or audiences yourself. As a result, you have more time to spend strategizing for your clients and business as a whole.

2. Do I have a static lead or sales CPA goal as my main KPI?