About CPA bidding

  
Important: This article applies only to the Hotel Ads Center. If you migrated your Hotel campaigns to Google Ads, read about bidding for Hotel campaigns in Google Ads.

CPA (pay-per-conversion) is a way to pay only when a user converts. CPA is a Smart Bidding strategy that automatically adjusts your bid to help you maximize conversions. You pay a percent of booking value that you set.

This bid strategy is only available with Hotel campaigns and isn't supported for legacy account bids. This section describes the CPA bid strategy in the following topics:

  1. Overview of CPA
  2. Set up CPA
  3. Evaluate performance
  4. Best practices
  5. Frequently asked questions

Overview of CPA

CPA helps you achieve a predictable cost per conversion. This cost is a percentage of booking value that you set in the Hotel Ads Center. The CPA should represent how much revenue you're willing to spend on Hotel Ads for each dollar that you earn from bookings from your Hotel Ads.

Benefits

  • Maximize your conversion value with minimum effort
  • Define a consistent cost relative to revenue you earn from Hotel Ads
  • Adaptive learning predicts performance at different bid levels to maximize conversions
  • Auction-time bidding for every auction, not just a few times per day

Before you begin

Before you can use CPA, you need the following:

  1. Conversion tracking with the following required parameters:
    • hct_base_price
    • hct_currency_code
  2. While optional, these parameters also help Google optimize your performance:
    • hct_checkin_date
    • hct_checkout_date
    • hct_partner_hotel_id
    • hct_total_price

Notes:

The value of hct_base_price is used to compute your CPA cost for a particular conversion. If this value is missing from a conversion event, then Google falls back to using hct_total_price as the basis for computing your cost. If neither is provided, Google will interpret that conversion as having zero value.

There is no minimum number of conversions required to enable a campaign using CPA.

How CPA works

The CPA bidding strategy predicts future conversions and associated values by using your reported conversion values, which you assign through conversion tracking. Then CPA sets an optimal cost-per-click (CPC) bid while trying to maximize total conversions at the cost-per-conversion equal to your target.

To help improve your performance, the CPA bidding strategy adjusts bids using auction-time details such as the customer's device type and location, the Google site where the Hotel Ad appears, geographic location, itinerary, and hotel price.

The average cost-per-click will vary, but regardless of the number of ad clicks, you only pay if a conversion happens.

Example:

Users who didn't convert Users who do convert
  • Your CPA bid is 12%
  • User clicks on your ad
  • User doesn't convert on your site
  • You pay $0
  • Your CPA bid is 12%
  • User clicks on your ad
  • User converts on your site. Booking value is $450
  • You pay $450 * 12% = $54

For general information on conversion tracking and how Google uses conversion tracking data, see Track sales and other conversions.

Note: CPA is meant to help maximize your ads' reach, and because you only pay when users convert, costs from this bid strategy will not count towards your account's daily budget.

Choose the right CPA bid

To find the right CPA bid, determine what distribution margin you want to spend for your bookings.

For example, if your goal is to spend an average of 12% of booking value and maximize your booking revenue, and you have a cancellation rate of 10%, then your CPA should be 10.8%.

If you decrease your CPA, your bid in the auction will decrease and can result in less bookings. Similarly, if you increase your CPA, your bid in the auction will increase and can result in more bookings. Keep in mind this depends on the auction, and booking volume changes aren't guaranteed with CPA changes.

Conversion metrics

Conversion metrics such as "Conversions" and "Average Booking Value" can be updated one or more days after a click occurs depending on when an individual user converts and your account's attribution window (the number of days after the customer clicked that we'll attribute a conversion to a click). This means that the cost for a campaign using a CPA bid strategy can also change one or more days after a click.

Set up CPA

To set up CPA for a campaign:

  1. Open the Hotel Ads Center.
  2. Click Dashboard at top.
  3. Click the campaign you'd like to set for CPA bidding.
  4. Click the Campaign settings button.
  5. In the "Bid Strategy" section, use the drop-down menu to select CPA.
  6. Enter a percent of booking value.
  7. Click Save.

Evaluate performance

You can view the current conversions and cost-per-conversion for a campaign by using the campaign dashboard view of the Hotel Ads Center.

To view conversions and CPA for a campaign

  1. Open the Hotel Ads Center.
  2. Click Dashboard.
  3. In the "View by" menu, select Campaign.
  4. Click the campaign for which you'd like to see conversions and CPA data.
  5. From the "Select columns" drop-down list, select Conversions, and Cost / Conv.
  6. The view will be updated with the new columns.

Best practices

This section lists some best practices when setting up and using the CPA bidding strategy.

Setting up CPA

  • To get the best performance with CPA, your campaign should have at least 20 conversions per day. If your campaigns don't have this many conversions per day, consider merging some campaigns together when using CPA.
  • Organize hotels into different campaigns depending on distribution margin or conversion rate. CPA may perform better when partners group hotels with similar ROI goals and performance. Learn more about organizing hotels with campaigns.
  • Allow the campaign to accumulate traffic for at least 7 days before evaluating performance and making changes.
  • Don't change your CPA bid more than once every few weeks. This gives you time to account for any conversion delays and give the CPA autobidder strategy time to adjust.
  • Ensure conversion tracking is well implemented on all points of sale and all devices. Outages in conversion tracking (complete or partial) can significantly impact your performance and volume.

Tune and evaluate

  • The more data Hotel Ads has, the more it can optimize CPA bids.
  • Keep in mind that changes in ad performance are natural, and you may need to use the CPA bid strategy for some time to understand how it affects your campaign's performance.
  • Don't make large changes to a campaign while running the CPA bid strategy. (For example, don't pause all active hotel IDs and replace them with new ones.)
  • Don't remove your conversion tracking code from your website or move it to a different location while running the CPA bid strategy. These kinds of changes can result in significant changes in which clicks lead to reported conversions. If you do change your conversion tracking code, the CPA bid strategy might need several weeks to adjust to these changes.
  • Compare your clicks and conversion rate before and after using the CPA bid strategy to gauge its impact on your campaign.

Frequently asked questions

Does CPA ever bid above the maximum bid cap set in the budget tab?

Yes. CPA uses Smart Bidding to decide your bid in each auction, and it may bid more than the max bid cap you have set. Note, with CPA you never pay for clicks, and only pay when a user converts.

On what levels can partners apply and set CPA bids?

Partners can use the CPA bidding strategy at the campaign level only. It's not possible to set CPA bid overrides for ad groups or hotels.

How does the CPA bid strategy interact with the CPC auction?

When using the CPA bidding strategy, Hotel Ads sets optimal cost-per-click (CPC) bids for partners' hotels to help maximize booking value at the specified cost-per-conversion, which is a percent of booking value you set.

What's the difference between CPA and the Commission bidding strategies?
  CPA Commission
What it does
  • Bid a percentage of the total booking value for a conversion on your site and only pay when a user completes the booking.
  • Pay precisely the value you set for users that complete a stay with you. Commissions can be between 10% - 50%
Benefits
  • Risk free: Pay only when you get a booking.
  • Easy to manage: Eliminates complexity and risk of manual CPC bidding.
  • Simple integration: Unlike Commission bidding, no reconciliation process is required.
  • Flexible control: You can change your CPA bids and targets at any time.
  • Risk free: You pay only after a customer stays at your property.
  • Easy to manage: Eliminates complexity and risk of manual CPC bidding.
Requirements
  • Hotel Ads conversion tracking
  • Qualified partners only
  • Hotel Ads conversion tracking
  • Reconciliation reports submitted at regular intervals detailing completed stays and cancellations from bookings made through Hotel Ads.
Are CPA costs billed as of the click date, or as of the conversion date?

Conversion metrics (counts, values, cost, and ROAS) listed in the performance dashboard, and in performance reports, are always associated with the date of the click that led to the conversion, because of delayed conversions.

CPA costs are billed as of the date of the conversion. This means that you may see a slightly different total cost for your CPA campaigns in the Hotel Ads Center and your monthly invoice. For example, if a click happens on the last day of this month, and the user converts on the first day of the next month, you would only be charged for that click on the invoice at the end of the next month. However, your performance metrics for the last day of this month (the day of the click) would be updated to reflect that conversion and CPA cost.

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