Optimized Targeting in Google Ads: Should You Use It? ($12,000 Spent)

By: Corey Philip
Updated: August 24, 2022

If you’ve used Google Ads in the last few months you may have noticed the little setting you can toggle to use ‘optimized targeting’.

Should you hit the button and turn it on?

In this post I’m going show you the performance breakdown of our campaign using this setting!

I also cover this topic in video on my YouTube Channel.

What is Optimized Targeting?

The optimized targeting basically allows Google to disregard your audience targeting setting and find people that are likely to achieve your set conversion event.

This opens your advertising up to far more users, that may convert but are not included in your targeting settings.

According to Google, as you can see in the green box, “ads have seen an average of 20% more conversions by using optimized targeting”.

That said, I am skeptical of basically everything Google puts out that touts their performance!

Types of Campaigns You Can Use It With

Optimized targeting is avail be on Google Discovery, Display, and Video campaigns.

It is located in the ad group settings, which in my opinion makes it easy to overlook.

In my case use discussed herein, it was used with a Discovery Campaign.

Results Of Our Campaign Spending On Optimized Targeting

We launched our Discovery campaign on May 16th 2022, targeting a specific conversion. The conversion was a user completing a multi-step lead form for a financial service offer.

We started with max conversion, but after getting about 50 conversions a target CPA of $20 was applied.

Here’s the performance since we launched

As you can see from the screen shot above, we spent $12,018.23, to get 534 conversions with a cost per conversion of $22.51

Do note that while the cost per conversion is $22.51, above our Target CPA, the overage is attributed to the early days of the campaign when it was still ‘learning’.

For the sake of looking at performance AFTER learning was completed, let’s just look at the last 30 day. Here’s a screen shot…

A look at the 30 day results has $4,812.45 generating 248 conversions and… our cost per conversion below the $20 target at $19.41!

Google’s learning and Target CPA does indeed work!

Breaking It Down To Our Audience Segments Vs Optimized Targeting

What we really want to see is how many more conversions the optimized targeting got! Fortunately Google makes it easy to do. We can hit the ‘audience’ on the left menu from the ad group level, and then ‘show table’ under Audience Segments.

From this view we can see how many of the 248 conversions in the last 30 days came from our targeted audience segments compared to the optimized targeting. Here’s the breakdown from the report above.

Our Targets: 185 conversions @ $19.73 each

Optimized Targeting: 63 conversions at $18.44 each

We could express this as optimized targeting got us 34% more conversions at a slightly lower cost!

I’ll take it. I know the value of a conversion event is $40, so each conversion I get at or below $20 ads at least $20 of profit.

Before Switching TO Optimized Targeting

Optimized targeting has shown to be incredibly valuable in this campaign, and we are moving all of our Discovery campaigns to optimized targeting. We are also testing a video campaign with optimized targeting.

Here’s what you should no before making the jump to optimized targeting.

Make sure you have defined a valuable conversion event

Not all conversion events are equal. In come cases Google may consider a simple click on your ad a ‘conversion’, or a page view as a conversion. To be successful you need to make sure you have defined a conversion event that you know the value of.

In my case I know the value of this specific conversion is $40 each.

Then you need to make sure you have that specific conversion event set in the campaign settings. As pictured below.

Sometimes Google will group conversions together making it easy to to have multiple conversions set, which will give you incorrect results.

If you need help defining and tracking your conversion event, contact me; as a that is one of my areas of expertise.

Reduce budget because things can go wild

When you switch a campaign to optimized targeting, Google seems to restart learning entirely. From my experience when making the switch the campaigns spend double (or more) their daily budget an get few conversions until it figures things out.

For that reason I would radically reduce the budget to an amount you can patiently burn. For example if I have a campaign with a daily budget of $400/day and I am going to switch it to optimized targeting, I would reduce the budget to $50/day and wait for it to stabilize before increasing.

That’s all for now!

You’ve seen how my campaign using optimized targeting performance, and I’ve given you my 2 cents on implementation.

The next move is all yours!

If you found this helpful and insightful, let me know in the comments below!

Corey Philip

Founder of a home service / specialty trade contracting company (think patio's and deck) with a focus on customer experience. Quantitative investor. Data driven marketer. Runner.

Let's Discuss!  Drop A Comment Below.


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