An extension of the acronym CPA are the words Call Per Action. In Polish, this means that the advertiser only pays for advertising when the user performs a specific action, e.g. fills in and sends a contact form, subscribes to a newsletter or reads an article. There are several benefits to choosing this type of billing, primarily from the advertiser’s perspective. CPA helps to maximise the number of conversions (which could be, for example, the above-mentioned activities) and clearly defines the cost to be paid for specific ones.
CPA versus CTR and CPC
CPA is closely related to two other ad performance indicators – CTR (Click Through Rate) and CPC (Cost per Click). CTR is the ratio of the number of clicks on an ad to the number of impressions, and CPC is the cost per click on an ad. A higher CTR usually means a lower CPC and a lower CPA because more people clicked on the ad, resulting in a more effective advertising campaign.
How do you calculate CPA?
CPA can be calculated by dividing the total cost of an advertising campaign by the number of completed actions. For example, if an advertiser spent PLN 1,000 on a campaign and received 100 clicks, the CPA is PLN 10 per click. This simple calculation helps advertisers determine how much each completion of a particular action costs and whether the campaign is delivering the desired results.
How to lower the CPA?
Lowering the CPA is one of the main goals of any Google Ads campaign. Here are some ways to do it:
- Choose the right keywords – keywords are crucial for advertising on Google. Choose relevant keywords that match your product or service and attract potential customers who are interested in your offer.
- Optimise your landing page – Your landing page should have a clear and attractive layout, easy to navigate and in line with your product or service offering. A properly optimised landing page can increase conversions and reduce CPA.
- Take advantage of retargeting – retargeting allows you to display ads to people who have already visited your website. This makes the ads more targeted and can attract the attention of potential customers who have already shown interest in your offer.
- Test different ad variants – testing different ad variants allows you to see which version works best and brings the lowest cost per conversion. You can test different elements such as the headline, ad text, image or CTA (Call to Action).
- Define the target audience well – choose the right target audience for your advertising campaign. This will ensure that your adverts are displayed in front of people who are interested in your offer, which increases the chances of completing the desired action.
CPA is a key performance indicator for Google Ads. It allows you to determine how much it costs each time a specific action is completed, such as clicking on an ad, downloading a file or making a purchase. Advertisers can lower the CPA by choosing the right keywords, optimising the landing page, using retargeting, testing different ad variants and defining the target audience well. This will make the ads more effective and attract more potential customers.