Cost Per Acquisition (CPA) makes reference to the amount of advertising or marketing budget that has to be spent to acquire a paying customer. This can be calculated using the formula CPA = Cost / Conversions. In marketing you should certainly be looking for ways to decrease your CPA.
By reducing your CPA you can increase your return on investment (ROI) without increasing the amount of money that your spend. This will allow you to control the cost from the start of your campaign.
Rather than focusing on sales and gaining traffic, focus instead on optimizing cost. This will stop valuable marketing resources from being wasted and will help to ensure that your PPC campaign budget is spent on the right people.
Optimize Your Landing Pages
First impressions always matter in life, and that certainly applies to the landing pages that you are sending visitors to. These landing pages will be the first thing that the visitor sees in regards to your company and will massively impact your overall conversions.
To test the effectiveness of any of your landing pages, you should consider doing the A/B test. This involves duplicating the landing page and changing a singular characteristic. Send half of your traffic to Page A and the other half to Page B and after a period of time, analyse the results.
By doing this test you will be able to see which landing page can help to boost conversion rates. In the long run, this will decrease your CPA.
Improve The Quality Score
Quality score is determined by the quality and relevance of both your keywords and your ads. The quality score is then used to determine your cost per click (CPC). Your CPC is then multiplied by your maximum bid, and this is used to calculate the rank of your ad in the auction process.
As you optimise both your keywords and your ads the user experience will improve. It will also likely improve the effectiveness of your ad and improve your quality score. As your quality score improves, the CPC will reduce. In addition, this will decrease your CPA.
Update Your Ad Copy
When you are busy updating extensions and optimising keywords, it can be easy to forget about the content of your ad. You need to check that it is still aligned with your objectives and compare it to your best performing ads to see how it can be improved.
Making small changes to your ad copy will help you reach the right audience and improve the chance of them clicking on your ad. Research things such as how to optimize your call to action (CTA). Add a level of urgency to your copy to compel visitors to click through to your website.
Optimize with a Clear Objective in Mind
Optimisation without a clear objective and strategy in place will lead to poor results. By making random small tweaks when the mood takes you can negatively impact your entire campaign. While it may seem easier to optimise on the fly, you may miss sales opportunities as well as waste time and money.
It is much better to plan your strategies well in advance with set goals and objectives. This will lead to effective management where you are much less likely to miss opportunities or waste your budget.
Having a well-planned strategy will also give you an advantage over your competitors that are optimising randomly and missing out on visitors.
Use Retargeting Techniques
Retargetting (otherwise known as remarketing) allows you to reach out to the people who have visited your website on a previous occasion. By showing them relevant ads on other websites they visit you can compel them to come back to your own website and hopefully convert into paying customers.
On average, only 2% of leads will convert on their first visit to a website. This means that encouraging more visits will increase the odds of them converting.
To retarget visitors you will need to add a piece of code called a retargeting tag to your website. This will then tag visitors to your website and add them to your retargeting leads.
Retargetting visitors who abandoned their shopping cart on your website is especially important. These people have a strong intention to convert, therefore, reaching them with the right message leads to a higher chance of them converting.
Stop Low Performing Campaigns
Unfortunately, some campaigns just don’t work, or they have a consistently low performance. Working on optimising these campaigns may prove effective, but if the metrics do not improve it may be better to stop running them.
This will allow you to place more of your budget into the campaigns that produce better results and have a lower CPA. This will help to increase your profit margin and decrease your CPA.
Pause Low Performing Keyword
When it comes to optimizing your keywords, you may end up having to pause a few of them. This may be due to the fact that they are getting no traffic, or possibly just not bringing in the number of conversions that you should.
By pausing these keywords you will be able to allocate more money to high performing keywords or even to test out new ones. This will improve your campaign as a whole and reduce your CPA if done correctly.
Replace Broad Match Keywords
This may be quite a long task, however, it is well worth the time that it takes. You will need to check the metrics for each of your broad match keywords. If they have a high volume and click rate but no conversions, it may need to be changed to a phrase or an exact match.
Broad match keywords can be rather problematic as a whole due to the fact that your ads are more likely to appear for irrelevant searches. However, for some keywords, it can work well so it is worth checking before you make the changes.
Add Negative Keywords
Negative keywords are often overlooked, however, they can be a huge asset to your campaign if used correctly and can have a massive impact on your CPA. This is especially the case when broad match keywords are in use.
By adding more negative keywords and refining your preexisting list you will help prevent your ads from appearing for irrelevant searches. This means that more of your budget will be spent on visitors who have a higher chance of clicking on your ad and eventually converting.
Fix Any Technical Issues On Your Website
One of the most important things that you can do if you want to reduce your CPA is to fix any technical issues on your website. From broken links to a slow checkout page, this will all negatively impact your campaign as a whole.
Spend a substantial amount of time thoroughly testing, reviewing and auditing your website. Any technical issue that you may come across should be fixed promptly as they may either stop visitors from converting or make them decide that they don’t want to. Once the issues are fixed, it will decrease your CPA.