Calculate optimal CPA/CPI bids based on your unit economics
Your maximum bid should be based on the value a user brings (LTV) minus your required margin. Factor in LTV prediction confidence—bid lower when uncertain.
Formula: Max Bid = (LTV × Confidence) / Target ROAS × (1 - Margin %)
Start conservative: Begin with lower bids and increase as you validate LTV predictions.
Segment bids: Different user segments have different LTVs—bid accordingly.
Account for lag: Early cohort data underestimates true LTV. Adjust bids as data matures.