Google Is Making Changes to tCPA & tROAS: What You Need to Know
In March of 2021, Google made an announcement that two of its oldest automatic bidding strategies, Target CPA and Target ROAS, will be retiring. The use of the word "retiring" lead to a general consensus that these strategies were going away forever. This is not true! tCPA and tROAS are and will continue to be very much available, but just not as a primary bidding strategy. Instead, they will be options within the Max Conversions and Max Conversion Value strategies.
Like other recent changes Google has released this year, it will be a gradual change. Unlike other changes released this year, there isn't much you have to do. This is merely a reorganization of existing features. But it can't hurt to play it safe and be proactive. So in this post, I'm going to:
- Review tCPA and tROAS and how they’re changing.
- Provide tips on using this change as an opportunity for your account.
- Share what the PPC community has to say.
What are tCPA and tROAS?
Let’s quickly brush up our knowledge on the tCPA and tROAS functionalities. These two automated bidding strategies use machine learning to optimize your bids based on a goal you set: an ideal target Cost Per Acquisition or Return On Ad Spend, respectively. With these strategies, you’re essentially saying “Okay, Google, take my budget and bid whatever you need to bid to get me the most conversions at the cheapest cost or highest return percentage possible.”
This is favorable if you are trying to get the most bang for your buck in terms of your cost per conversion, or if you are an ecommerce account with revenue tracking set up for a heavy focus on ROI.
The trouble with tCPA and tROAS
tCPA and tROAS are both two of the oldest automated bidding strategies in the Google Ads game, and with that title also comes some drawbacks—which is why I’m not all that surprised about this change.
While it’s nice to be able to pick a target, it also means you have to be constantly checking in and readjusting your target CPA or target ROAS to have it properly align with your campaign’s current performance metrics.
Yes, in an ideal world, we’d all like to shoot for a CPA of $1.00 or a ROAS of 900%, but if you set your target too far off from where you are currently at—such as setting a target CPA of $1.00 while you are currently at a $100 CPA— then Google will be fumbling around trying to figure out how it can bid low enough to bring you in that $1.00 CPA. Pretty annoying, right?
Historical data needed
Additionally, we’ve historically seen that you really need to have a good amount of historical conversion data in order for these strategies to perform well. If you’re working with a new campaign or new account that has few or even zeros across the board for conversions, then you’ll also see funky performance with these strategies. This is because Google’s machine learning determines what it should bid to hit your target by your historical conversion metrics, as mentioned in Google’s tCPA resource.
What are the tCPA and tROAS alternatives?
As mentioned, this change will be gradual with several months’ notice, so you’ll still see tCPA and tROAS in the primary list of bidding options for now.
What’s going to be different, though, is Max Conversions is now going to have the CPA target setting underneath it just like Google had with tCPA. And Max Conversion Value will have an option underneath to opt in to optimize for a target ROAS, just like the old tROAS.
Do I have anything immediate to worry about with my account?
The short answer is no, and here is why:
No action needed
According to Google, no action is needed at this time. Like we mentioned, This is a reorganization, not a retirement, so for those campaigns in your account already on either of these two strategies, they’re free to continue business as usual.
Your campaigns will get converted over by Google
Google has also promised that it will convert your tCPA and tROAS campaigns for you, to either Max Conversions or Max Conversion Value with the same inherited target CPA or ROAS, accordingly.
Performance will not be impacted
You can rest assured that not only is this a change that will have all the heavy lifting done for you, but also that it will be a smooth transition with no change to your current setup or data. Google states that performance should not be impacted by the switch, so you don’t have to worry about putting your campaigns back through the Algorithmic Learning Period,
You you can rest assured not only is this a change that will have all the heavy lifting done for you, but also that it will be a smooth transition with no change to your current setup or data.
How can I make the most of this change?
We know that we don’t want to be changing bid strategy every week or even every month because they take time to ramp up. But with this change, there are some things we can do to benefit our campaigns.
- Don’t move the bidding on any tCPA or tROAS campaigns you’re not comfortable with changing just yet. These strategies will still be an option for the foreseeable future.
- Identify any low-performing campaigns currently on tCPA or tROAS that you’d like to plan to switch to Max Conversions or Max Conversion Value once the option is available.
- Take this as an opportunity to check up on your bidding strategies across your account. It’s always good to reevaluate your current goals with respect to your current metrics. Ask yourself questions like “Do I really want that campaign on Max Clicks still to be optimizing for Clicks or do I have enough historical conversion data to try out Max Conversions?”
- If you’re not using tCPA or tROAS at all, don’t let this change slip through the cracks. Use this time to identify any areas where you may want to make the jump over to the new Max Conversions with tCPA or Max Conversion Value with tROAS as these are new options for further optimization.
Input from the community
We asked additional experts in the PPC community about the retirement of tCPA and tROAS, and reactions vary. We first spoke to WordStream Senior Account Manager Holly Niemiec.
There is still some control
Niemiec agrees that this change is in line with other recent changes that push toward automated bidding, but this time with some control afforded to advertisers:
“I think that this is another way for Google to encourage further Smart Bidding adoption, by encouraging users to start with Max conversions/Max conversion Value. But we still have some control by being able to switch to tROAS and tCPA within that strategy.
tROAS and tCPA aren’t completely gone
She also points out that this availability of tROAS and tCPA through Max Conversion and Max Conversion Value is not altogether foreign to advertisers, as it’s been a part of Smart Shopping campaigns for quite some time.
This change can benefit advertisers with smaller budgets
Overall, Niemiec maintains a positive outlook on the switch:
“I think this just streamlines the approach to campaign bidding strategies. For users who are still hesitant to adopt Smart Bidding, this is an additional sign that it will continue to be a priority for Google moving forward and that it is definitely something to start testing. Smart Bidding strategies have evolved greatly over the past few years, and can really help advertisers with smaller budgets to compete in saturated markets while still hitting their performance goals.”
"For users who are still hesitant to adopt Smart Bidding, this is an additional sign that it will continue to be a priority for Google moving forward and that it is definitely something to start testing."
We also spoke with Brett McHale, founder of Empiric Marketing, LLC.
An unnecessary change
McHale has a more neutral opinion:
“Since tCPA and tROAS will still be available within Max Conversion bidding strategies and Google says this will have no impact on bidding, it seems like an unnecessary change that will confuse some advertisers. But if the results don't change, there doesn't appear to be anything to worry about."
Last, we talked to Mark Irvine, Director of Paid Media at Search Lab. He agrees that this is not a major change to worry about, but thinks that it is actually an unexpected improvement.
tCPA and tROAS are often used incorrectly
Irvine points out, “A challenge with the tCPA and tROAS bidding strategies by themselves is that many advertisers use them for the wrong reason. Most advertisers have a "target" CPA or ROAS—so why not use target CPA or target ROAS bidding, right? The problem is that Google will then take that target and optimize towards getting that CPA, even if it could have potentially done better.
Lots of advertisers, particularly small businesses, unintentionally fall into the trap of picking this bidding strategy and end up underwhelmed with their PPC performance. If your campaigns are restricted by budget, then tCPA or tROAS isn’t the bidding strategy you will get the most out of. Maximize conversions or Maximize conversion value is generally better at helping smaller budgets get the most out of their campaigns.”
Prevent costly conversions
“The newer bidding strategies,” Irvine goes on to say, “are designed to take the best from both worlds—Google will still seek to maximize your conversions for your budget, but the optional tCPA fields allow advertisers to give some guardrails around that objective. If Maximize Conversions was previously generating conversions, but at too high a CPA, this new field gives advertisers more control to reign in and minimize Google wasting their ad budget on more costly conversions. All in all, it's an unexpected improvement in my book."
"All in all, it's an unexpected improvement in my book."
Use the retirement of tCPA and tROAS as an opportunity
While this change in bidding strategy options feels major, it won’t take long at all for you to sweep through your account and get ready. A quick audit of the campaign level settings and metrics will help you identify any areas that could be impacted.
Again, once it’s rolled out, it’s still going to be up to you to decide to make the switch over to the new Max Conversion or Max Conversion Value, or simply continue on with the legacy tCPA or tROAS and let Google switch them for you. Whichever route you choose, you’re already making positive progress by staying on top of this new option and evaluating it against your current needs. Being prepared for changes like this in PPC is all it takes to stay nimble in an ever-changing digital marketing environment.
If there’s one thing Google has taught us, it’s that we have to roll with these changes in stride as evolution of the platform is inevitable. Take this as an opportunity to reevaluate all your campaigns bidding strategies and maybe give a few of those low performers a bit of a facelift!