Advertising system Google Ads is a sea of possibilities. And so one very interesting option is the CPA strategy, which allows you to use advertising funds in such a way that they bring as many conversions as possible – and after all, that’s what everyone in e-commerce cares about the most. Therefore, if you are not yet familiar with this strategy, it is worth your interest.
CPA what is it?
CPA, or Cost Per Action, can be translated as cost per action. The term works in online marketing and refers to such billing for online advertising, where payment occurs when a user-customer performs a certain action. Most often it is a matter of making a purchase, submitting a form or dialing a phone number.
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How to calculate Cost Per Action?
To calculate this indicator, sum up the total cost of the campaign and divide it by the number of conversions acquired.
What is a Targeted CPA?
In the context of the Google Ads system, Cost Per Action is one of the smart rate-setting strategies. Its job is to help you get as many conversions as possible. When creating a rate-setting strategy Target CPA cost is determined by the cost you are willing to pay for each conversion. The system works automatically when you search for a keyword phrase related to your business, the system calculates the probability of getting a conversion from that particular auction and thus adjusts the rate offered per click.
You can expect the CPA to be higher than the cost of clicks in the CPC billing model. The system calculates Cost Per Action by also taking into account the estimated number of clicks it takes to get a conversion. To lower this cost, it is worth working on increasing conversions – for example, by refining the landing page.
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Why is it important to bill in the CPA model?
This is one of the safest billing models – from the advertiser’s perspective. All thanks to the fact that you only incur costs if you get the desired action from your customers. Billing for a sale, a lead acquired or a contact form filled out is tangible proof of the campaign’s effectiveness. And that, with proper cost estimation, can be the most cost-effective.
Summary
Billing in the model described above is one option – certainly worth considering if you care about billing for real results from ads. Contact me if you need support in optimizing your Google Ads campaign.
