PPC professionals are always thinking about metrics and deciding on which ones are best for tracking the performance of their campaigns. Cost Per Acquisition or CPA as it’s often referred to, is a metric which measures how much you spend to attain each conversion. In comparison to the Cost Per Click (CPC) metric, it is normal for the CPA to be considerably higher - no matter how much you try (and we can only hope), not every user who clicks your ad will go on to convert on your site.
When it comes to metrics, many are interrelated. For example, the higher the Quality Score is, the lower the cost tends to be which may also lead to a lower CPA - all thanks to the relevance of the ad. Research has suggested that for each point on the Quality Score above 5 (on a scale of 0-10), the CPA tends to decrease by 16% meaning the more relevant the ad is to the consumer, the more likely they are to convert.
There are a range of things you can do in order to decrease your CPA and here are ten top tips:
Tip #1 - Work on your bids
Applying good AdWords bidding strategies is an essential part of maximising the performance of an account and achieving key business goals. There are two types of bidding strategies and both can be used together or alone depending on what you want to achieve.
- Automatic bidding: with an automatic bidding strategy, AdWords will automatically adjust your bids to achieve the objective of your campaigns as it sees fit i.e. when it is expected to perform best.
- Manual bidding: differing from automatic bidding where you allow AdWords to do the work for you, a manual bidding strategy gives you complete control over the maximum CPC which can be adjusted according to historic data and general account performance.
Tip #2 - Find more specific keywords
One way to discover new keywords relating to your campaigns and ads is to run a Search Terms Report. This report will reveal which search terms were used by your target audience before clicking on ads and if they are relevant to campaigns you have running and have enough search volume, you may consider adding them as part of your list of keywords.
Tip #3 - Increase Quality Score
Quality Score is a number which AdWords assigns to keywords attributing a value between 0 and 10 with 10 being the maximum. If your keywords have a Quality Score of 10, this means that as those keywords are the most relevant, you will be paying the lowest price possible for your position. Additionally, by optimising your Quality Score, you will be rewarded with an overall reduction in your costs and an improvement in your search rankings.
Tip #4 - Create text ads that appeal to customers
If you are operating in a relatively competitive marketplace, one problem which may occur is your ad copy is very similar to your competitors. So… in order to create successful ad copy, the first thing you need to do is to think about your USP and be sure to highlight this. If you offer something your competitor doesn’t i.e. free next day delivery, it is very important that you include in the ad copy, keywords, ad prices, offers and exclusive promotions for users.
Tip #5 - Match your keywords
Good click through rates (CTR) on your ads are great but not so great if your visitors don’t convert. However, a great way to lower CPA is to analyse your existing ad copy by looking at which ads are driving traffic of no value to your site. When a user searches on Google, let’s say for instance “digital transformation services glasgow” and these keywords are included in both the ad copy and on the landing page, AdWords will display the ad with the keywords emboldened. With the keywords standing out and indicating relevance, this increases the chances of the user visiting your site and making a conversion.
Tip #6 - Custom ad scheduling
Another possible way of reducing your CPA is by identifying CPA performance by time of day. For example, a food delivery service may only want to advertise when their delivery service is available i.e. 5pm-12am and would schedule their ads to display during these hours. Now we’re not saying advertising during the day would be a waste of money (as some people may see the ad at lunchtime and keep it in their mind until that evening), but you should look at the best performing times of day to really get the biggest bang for your buck.
Tip #7 - Landing page optimisation
It is essential that you have designated landing pages set up and have your ads pointing to the most relevant page (this helps to increase the Quality Score of your ad). When building out your landing pages, you should ask yourself the following questions:
- Are you driving all traffic to the same landing page?
- Are there different, more precise landing pages which may boost overall conversion rates?
By answering both of these questions you will be better placed to optimise your landing pages whether that is developing a page catering to all or building a few, very specific landing pages optimised for exactly what your target audience are searching for.
Tip #8 - Pause campaigns in unprofitable locations
Another way to keep the CPA low is to analyse which geographic areas have produced more conversions. If you identify a geographic location with very little conversions yet high spend, this is when you would look to exclude these cities or geographic locations and assign more budget to the best performing areas to drive ROI.
Tip #9 - Ads on mobile, are they profitable?
With more and more people browsing on smartphones, mobile ads reach a lot of people and it is for this very reason many companies create mobile ads (complementing the desktop advertising strategy). However, if your website is not mobile-friendly, you are effectively investing a considerable amount of money to let your customers down at the final hurdle i.e. not being able to complete a conversion or find the information they are looking for on a mobile device. Therefore, if you are investing a great deal into mobile ads and not seeing return on investment, we recommend pausing these campaigns until such time that you have a responsive site.
Tip #10 - Pause all unprofitable paid campaigns?
Following a similar structure to what we mentioned in regards to mobile ads, it is imperative to notice from the outset if ads aren’t performing. The last thing you want to do is spend huge amounts of your advertising budget without reaping the benefits. If your ads are not generating profits (or paying for themselves plus more), pause them all and rethink your strategy.
So that’s our ten top tips - do you have any other tips you would add for decreasing your cost per acquisition? Let us know over on Twitter.