How does target cost-per-acquisition (CPA) bidding determine the optimal cost-per-click (CPC) bid?

  • It uses conversion history to set higher bids when a conversion is more likely
  • It sets CPC bids as one-tenth of the current CPA bid setting
  • It bids a static CPC value based on the current maximum CPC settings
  • It adjusts CPC bids based on existing bid adjustments

The right answer is:

  • It uses conversion history to set higher bids when a conversion is more likely

Explanation: 

Target cost-per-acquisition (CPA) bidding finds the optimal cost-per-click (CPC) bid using conversion history to set higher bids when a conversion is more likely. Using historical information about your campaign and evaluating the contextual signals present at auction-time, Target CPA bidding automatically finds an optimal bid for your ad every time it’s eligible to appear. Google Ads sets these bids to achieve an average CPA equal to your target across all campaigns using this strategy.

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