Data shows that your client’s ad that appears to people in San Francisco gets 120 conversions at a cost of £1200 and cost-per-acquisition (CPA) of £10, while ads showing in Houston get 70 conversions at a cost of £1400 and CPA of £20. If you have a CPA goal of £12, what bid adjustment would you set for each location?
- +40% for San Francisco, -40% for Houston
- +40% for San Francisco, -20% for Houston
- +20% for San Francisco, -20% for Houston
- +20% for San Francisco, -40% for Houston
The correct answer is: +20% for San Francisco, -40% for Houston
Explanation: CPA for San Francisco is $10 and CPA for Houston is $20. If you have a CPA goal of US$12, you need to adjust your bid by +20% for San Francisco and by -40% for Houston. Bid adjustments allow you to show your ads more or less frequently based on where, when, and how people search. For example, sometimes a click is worth more to you if it comes from a smartphone, at a certain time of day, or from a specific location.
