Target CPA (tCPA)

You tell the platform what one conversion is worth paying for, and it adjusts every bid using signals such as device, location and time of day to land on that average. Some conversions cost more and some less; the target is an average. Google offers it across Search and Google Demand Gen campaigns, and native networks such as Taboola offer an equivalent target on their conversion-maximising strategies.

In search arbitrage the "action" is whatever event the operator reports back: a keyword click on the lander, a search, or a click on a feed ad. The target must sit below the revenue that event brings, which makes tCPA a direct expression of break-even point.

Its weakness is that it treats every conversion as equal. A feed click on an insurance keyword may earn ten times one on a recipe keyword, yet tCPA values them the same. Operators whose keywords vary widely tend to move to Target ROAS or other value-based bidding, which use the actual revenue of each conversion.

An example

Say one in four visitors clicks a feed ad and each such click earns $0.80. A conversion is worth $0.80, so a target CPA of $0.60 implies paying about $0.15 per visitor and keeping $0.05 of margin per visitor.