Below is the answer and explanation for the question executives at a small e-commerce company are debating Google Ads performance metrics. If the budget is unlimited as long as return on investment (ROI) is positive

Executives at a small e-commerce company are debating Google Ads performance metrics. If the budget is unlimited as long as return on investment (ROI) is positive

• Ad spend should always be 7% of revenue, which should be used as the target ROI
• Determine whether the campaigns are profitable, then test different target cost-per-acquisition (CPA) bid increases to see which maximizes total profit ✅
• The company’s email campaigns are the most profitable, with a cost-per-acquisition of £15, so it should use that as a benchmark when setting target cost-per-acquisition (CPA) bids
• Decrease the target cost-per-acquisition (CPA) for the campaigns from £15 to £10 to drive an increase in profit per customer

correct answer

• Determine whether the campaigns are profitable, then test different target cost-per-acquisition (CPA) bid increases to see which maximizes total profit ✅

explanation

Executive need to test keep experimenting with CPA bids until the maximum profit is achieved. Target CPA is a Google Ads Smart Bidding strategy that sets bids to help get as many conversions as possible at the target cost-per-acquisition (CPA) you set. 

Read more here: https://support.google.com/google-ads/answer/6268632

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