Fun reading for a university class, but the real world doesn’t work this way. Optimizing for a target cpa is never a possibility because at an agency or in house marketing team your given x budget and expected to spend it.
I’ve never seen someone underspend a budget and be thanked for it.
Indeed. I would like to see further reading on the methodology of adjusting your spend to maintain adequate levels of conversion while hitting your budget.
Of course, many agencies can quite quickly find places to spend money beyond AdSense :)
Exactly, this appears effective projecting the fixed budget for one specific tactic, on a product with geo or demo targeting limitations.
The blog post failed to mention that when scaled up there is much more in play than strictly consumer acquisition (e.g. brand awareness) that is just as important when marketing in most B2C verticals.
You're right that there's more than just last-click cost per conversion, but that doesn't mean this approach is incompatible with these extra complexities.
You might run conversion lift tests as a way to calculate the impact of increased brand awareness, and you could plug the data from these into the method outlined in the post. There you'd be looking for the optimal cost per incremental conversion rather than just optimal cost per conversion.
This is just one idea, hopefully shows that the post's method doesn't have to just use last-click conversion data.
While true, this kind of analysis would still be useful for the allocation of that budget. You should still aim for maximum profit when you actually can calculate that value and dump the rest of your budget somewhere else that makes sense but is much harder to quantify (market research, brand marketing).
In any case, my experience is that "in the real world" is code for just giving in to systemic inefficiency and purposefully mismanaging your resources.
This is a good point, and you're right that some brands work this way.
I've worked agency and in-house, and most of time I've worked without budgets, just trying to maximise volume at a particular CPA. More brands are moving this way, but a few do still just stick to fixed budgets.
I’ve never seen someone underspend a budget and be thanked for it.