Pay-per-click advertising is an acronym-heavy field. The name is an acronym – PPC! It can take some time to get used to navigating such a terrifying environment of capitalized letters, especially for newcomers to paid media or laypeople learning their agency’s reporting. ‘CPA’ is an abbreviation that is used frequently in PPC. Let’s take a closer look at what a CPA is and how it might affect your business.
When it comes to advertising, your average CPA, or cost per acquisition, is the amount of money it costs to achieve one conversion, which may be a sale, a lead, a phone call, or anything else your company considers important.
This is a crucial figure since it indicates the expected ROI of your advertising efforts as well as the potential growth your company may expect when you increase your ad expenditure.
The formula for computing a CPA is as follows:
CPA = CPC/conversion rate percent
The CPC is £0.91 and the conversion rate is 1.19 percent in the real-world example below. As a result, the average CPA (cost/conversion) is £0.91 / 1.19 percent = £76.45.
How to Lower Your CPA Average
It’s all well and well to know what your CPA is; any idiot can calculate an equation if given one; however, because you’re reading this essay, you’re clearly not a fool. So, let’s go over some practical suggestions for lowering the average CPA.
Increasing the Conversion Rate of Your Page
Smart bid techniques that focus on increasing conversions are an excellent method to boost your conversion rate. Maximum conversions, target CPA, target ROAS, and maximize conversion value are all excellent methods for gradually improving conversion rates across your account.
Conversion rates may be improved by making minor adjustments to your landing pages. There are plenty of blogs out there that explain how to create high-converting landing pages in detail, but here are some fundamental steps you can take right now:
- Make sure the material on your landing pages is timely and relevant.
- On the landing page, there are clear CTAs that direct the visitor to the action you want them to do.
- Reduce the amount of time it takes to perform your conversion activity by reducing the number of clicks necessary.
- Consider utilizing the product pages as a landing page for eCommerce, or having your form displayed on the landing page for a lead-generation website so people don’t have to click to a second page.
- Include captivating graphics to get viewers to click on your CTA – a typical method is to use images of people pointing at or staring at your form or button. Skai’s homepage, for example, features a clear image of a lady staring at the ‘Book a Meeting’ button.
CPC (cost per click) reduction
Your quality score and bid define your average CPC, which in turn decides your ad rank. Without going into detail about ad rank and quality score, here’s the idea of what decides your CPC in an ad auction: how much you need to spend to win an ad auction is determined by a three-way interaction between keywords, ad content, and landing pages. Your average CPC is determined by a combination of these factors.