Selecting the right bidding strategy is one of the most consequential decisions in a Google Ads account. The two most popular options – Target CPA (tCPA) and Target ROAS (tROAS) – fall under Google’s Smart Bidding umbrella and rely on machine learning to set bids in real time.
Understanding how each works, the data requirements, and which strategy aligns with specific goals can dramatically improve campaign performance. This article compares between the two strategies and provides actionable tips.
What are Target CPA and Target ROAS?
Target CPA bidding seeks to acquire as many conversions as possible at or below a specified average cost. Target CPA bidding strategy uses historical data and real‑time contextual signals – such as device, location and time of day – to set bids that aim to meet your specified cost per action.
Advertisers choose an average CPA target, and the system raises or lowers bids in each auction to stay close to that figure. Because the algorithm treats every conversion equally, tCPA is best for campaigns where each lead or sale has similar value.
It’s recommended to have a minium of 15 conversions in 30 days before enabling a tCPA bid strategy. The more conversions a campaign tracks, the better, more stable smart bidding will work.
Target ROAS bidding aims to maximize the total conversion value while achieving a specific return on ad spend. Instead of a flat cost‑per‑action threshold, you specify a revenue ratio (for example, 500 % means you want five dollars back for every dollar spent). The system predicts the potential value of each click and bids higher for users likely to generate larger order values.
In order to work as intended, tROAS bidding strategy required a minimum conversion volume. Accrding to Google’s documenataion, Search, Shopping and Performance Max campaigns require at least 15 conversions in the past 30 days to enable tROAS. However, that’s a technical requirement and the industry standard is a minimum of 50 conversions a month with stable performance.
The strategy is inherently value‑based; it works best when you can pass reliable conversion values back to Google Ads and have meaningful differences in order value.
Formulas and data needs
To clarify the mechanics, Target CPA uses the formula:
You set a target for this average; some conversions may cost above or below that number, but the system will aim to bring the average in line with the target.
Target ROAS, by contrast, uses:
ROAS
So a 500 % target ROAS means that each dollar spent should return five dollars in revenue. Because ROAS depends on revenue data, accurate conversion value tracking is essential.
Google recommends running a tCPA campaign first to establish baseline performance before setting an ROAS goal.
When to Use tCPA Bid Strategy
Equal‑value conversions and lead generation
In industries where each conversion delivers similar value – such as lead generation, subscription sign‑ups or SaaS trial registrations – tCPA provides predictable control over cost. YeezyPay’s 2026 guide describes tCPA as the “bread and butter” for businesses where every conversion is essentially equal, noting that assigning values to conversions in such cases can confuse the algorithm. This makes tCPA ideal for:
- Lead‑generation campaigns focused on form fills or phone calls
- Subscription services where each new subscriber represents a comparable revenue opportunity
- SaaS companies optimizing for trial sign‑ups
Because tCPA treats all conversions equally, you can scale while protecting margins, provided your CPA target isn’t set unrealistically low.
However, there are trade‑offs: the algorithm may favor cheaper leads that don’t convert to paying customers, and it can under‑bid on high‑value opportunities if their predicted cost exceeds your threshold. Therefore, tCPA suits campaigns prioritizing volume and cost control over revenue maximization.
Data requirements and best practices
Google does not prescribe an explicit minimum conversion volume for tCPA, but the algorithm performs better with at least 15 conversions per month.
To get started, ensure conversion tracking is set up properly and include only relevant conversions in the “Conversions” column so that the bid strategy optimizes toward your primary goals. Avoid setting strict bid limits; Google notes that bid limits can restrict the algorithm’s ability to optimize.
Finally, monitor performance regularly and adjust your targets gradually, as dropping your target CPA too quickly can starve campaigns of traffic.
Portfolio tCPA strategies can also provide more data to the algorithm, smoothing performance across multiple campaigns.
When to Use Target ROAS
E‑commerce and variable order values
Target ROAS shines when conversions vary significantly in value. E‑commerce businesses with products of varying prices benefit from tROAS because it automatically allocates more budget to higher‑price items. ROAS‑based bidding also allows retailers to adjust spend during peak periods (such as holidays) to capture high‑value orders.
In B2B scenarios where leads have distinct values at different funnel stages, e.g., a newsletter sign‑up versus a booked demo, assigning values and optimizing for ROAS ensures the algorithm prioritizes more valuable actions.
Use tROAS when:
- Your product catalog spans a wide range of price points or margins
- You can reliably pass conversion values back to Google Ads using server‑side tracking
- Your campaigns achieve at least 50 conversions with value in a 30‑day window (higher thresholds apply to apps, Demand Gen and video).
- You aim to maximize revenue or margin and are comfortable with a potential reduction in conversion volume
Tradeoffs
Unlike tCPA, which focuses on conversion count, tROAS emphasizes conversion value – target ROAS often produces fewer conversions but higher overall revenue.
However, it requires accurate value tracking and enough data to prevent volatility and insufficient conversions may cause the algorithm to underperform.
Furthermore, tROAS is sensitive to tracking errors – if conversion values stop reporting correctly, the strategy can stall.
For brands that cannot measure revenue or whose products have uniform pricing, tROAS may offer little advantage.
Key Differences: Volume vs Value
The core difference between the two strategies lies in their optimization goals. CMLabs succinctly summarizes that tCPA focuses on the number of conversions at a specific average cost, whereas tROAS optimizes for the value of conversions. In practice, tCPA delivers a predictable cost per acquisition and is easier to implement because you only need a working conversion pixel; tROAS demands more sophisticated tracking but aligns bidding with profit, not just conversions.
Switching from tCPA to tROAS can yield significant improvements when appropriate. Google’s internal data shows that advertisers who transitioned from tCPA to tROAS experienced a 14 % increase in conversion value at a comparable return on ad spend. However, this upside comes with the aforementioned data requirements and potential for reduced volume. A careful evaluation of your business goals, margins and data infrastructure is necessary before making the switch.
Industry Use Cases
E‑commerce
Retailers with varied products often use tROAS to prioritize high‑margin or high‑priced items. By assigning different conversion values to product categories—e.g., $5 for an accessory sale and $500 for a premium product—the algorithm directs spend toward the most profitable opportunities.
Case studies cited by YeezyPay reveal that retailers who shifted to value‑based bidding saw dramatic gains in profit and revenue; one US lighting retailer achieved a 214 % profit increase and another furniture brand recorded a 40 % higher ROAS and 95 % revenue lift.
B2B and lead generation
For B2B advertisers and lead‑generation campaigns, tCPA often provides better cost control. Target CPA helps manage the average cost per lead in sectors with long sales cycles and higher acquisition costs. Assigning revenue values to leads can still enable tROAS, but many businesses choose tCPA to maintain predictable cost per lead while focusing on lead quality through audience segmentation and landing‑page optimization.
Mixed objectives
Companies with both e‑commerce and lead‑generation goals might employ different strategies across campaigns. For example, a software vendor could use tROAS for campaigns promoting subscription upgrades (where conversion value is known) and tCPA for free‑trial sign‑ups. Google Ads allows portfolio bid strategies to combine multiple campaigns under a single tCPA or tROAS target, enabling unified optimization across different campaign types.
Pros and Cons Summarized
| Bidding Strategy | Advantages | Drawbacks |
|---|---|---|
| Target CPA | – Predictable cost per conversion – Simple setup (no need for revenue tracking) – Good for equal‑value conversions and lead generation | – May favor low‑quality or low‑value conversions – Can under‑bid on high‑value opportunities – Performance depends on realistic targets |
| Target ROAS | – Aligns bidding with revenue and profit goals – Prioritizes high‑value customers – Flexible budget allocation to high‑value opportunities | – Requires accurate conversion value tracking and sufficient data – May reduce conversion volume; sensitive to tracking errors |
Best Practices and Tips for 2026
- Ensure data quality. Accurate conversion tracking is the foundation of both strategies. For tROAS, implement server‑side or enhanced conversion tracking to send reliable order values back to Google Ads. For tCPA, include only meaningful conversion actions in the “Conversions” column.
- Check conversion thresholds. Before enabling tROAS, make sure your campaign meets Google’s recommended conversion minimums—typically 15 conversions per month for most campaign types, with higher thresholds for apps and Demand Gen. Insufficient data can lead to volatility or limited spend.
- Segment by product value or margin. Separate high‑margin and low‑margin products into different campaigns. This allows you to set different tROAS or tCPA targets for each group and ensures the algorithm doesn’t under‑bid on premium products.
- Adjust targets gradually. Whether lowering your CPA or increasing your ROAS target, make changes incrementally. Setting aggressive targets too quickly can choke off traffic. Start with targets 15–20 % below your current performance to allow room for growth.
- Consider seasonality and promotions. For ROAS campaigns, increase budgets during peak periods and lower them during off‑seasons to capture high‑value opportunities. For CPA campaigns, adjust targets based on customer lifetime value and seasonality.
- Monitor for anomalies. Use Google’s “Explanations” tool to investigate significant performance changes in tCPA campaigns. For tROAS, watch for drops in conversion value or ROAS and check that conversion tracking is still firing correctly.
- Experiment and evolve. As privacy regulations and bidding algorithms evolve, keep an eye on emerging strategies like Optimized Cost Per Click (OCPC) and value rules. Running A/B tests between tCPA and tROAS (using campaign experiments) can provide data‑driven evidence for which strategy works best for your business.
Conclusion
Choosing between Target CPA and Target ROAS hinges on your business model, data sophistication and marketing goals. tCPA is ideal for campaigns where each conversion carries similar value and cost control is paramount, such as lead generation and subscription sign‑ups. tROAS suits businesses with diverse product values and reliable revenue tracking who want to prioritize profit over volume.
By understanding the mechanics, aligning strategy with objectives, and following best practices, advertisers can leverage Smart Bidding to drive both growth and profitability in 2026.
Further Reading
- Mastering A/B Testing in Google Ads: Strategies for Optimal Results
- Google Performance Max vs. Standard Shopping Explained
- Google Ads Bidding Strategies: The Ultimate Guide
- Spying On Google Ads: PPC Competitor Analysis
- 5 Performance Max Best Practices To Nail Sales
