YouTube tests cost-adjustment feature for Demand Gen tCPA campaigns

YouTube has begun rolling out a beta feature that automatically reduces costs for underperforming Demand Gen Target CPA (tCPA) campaigns, as reported by Search Engine Journal. The feature is designed to help advertisers stay closer to their target cost per acquisition during the early learning phase, which is typically the most volatile period for new campaigns.

The report noted that the system monitors new Demand Gen tCPA campaigns and, if conversions fall below Google’s predictions, it may retroactively adjust costs to better align actual CPAs with an advertiser’s target. The adjustment can activate within five days of a campaign launch and may continue for up to three weeks. Advertisers will not see credits or separate line items, with the recalibration reflected only in the final reported cost.

The update aims to reduce early-stage performance fluctuations and limit financial risk for advertisers while Google’s algorithms refine their predictions. However, eligibility for the adjustment depends on factors such as account quality, tracking accuracy and adherence to best practices, and the cost reduction is not guaranteed. The feature may apply only on certain days or to specific campaigns.

Analysts cited in the report described the move as a notable shift, with the company taking on part of the performance risk during a campaign’s learning phase.