→ What is CPA in Google Ads and how to improve it? 🥇

If you have come this far, surely you need to know what is Target CPA or Cost per Acquisition And that is what we are going to tell you in this article.

We often talk about different metrics in Google Ads or other advertising systems such as CPC, CPM, .

These are very important, but today we are going to talk about one to which we must pay all our attention, since the success or failure of our advertising campaigns depends on it. Today it’s the turn of CPA. If you want to meet others visit this article.

What is the CPA?

CPA are the acronyms for cost per acquisitionthat is, the cost of an acquisition or target action.

The two main types of acquisitions are:

• Sales: When we talk about e-commerce, when referring to CPA in we are referring to the cost per sale. That is, how much we have had to invest in advertising to get a sale.
• Records or leads: In this case, on informative websites, the Cost per Acquisition can also refer to the cost of acquiring a lead or registration.

However, companies that use Target CPA they will focus on getting as many conversions as possible while respecting the maximum cost of those conversions, whether it is a purchase, a phone call, a download or any other transaction you can think of. In this way, Google Ads algorithms and machine learning of this advertising tool will try to reach the always having the CPA limit marked.

How is CPA calculated?

Calculate CPA It’s easy, for this you have to divide the investment made in your campaign by the number of acquisitions.

For example, a client has invested 1,000 euros and has achieved 100 sales. We can say that the Cost per Acquisition of my client for that campaign is 10 euros. (We have divided 1,000 euros between 100 sales).

Why is CPA important?

The CPA It is one of the most important metrics of your advertising campaigns and as such we must take care of it and monitor it to ensure that your objectives are met.

• Have controlled the Cost per Acquisition It will help you to have greater control of the campaigns. For me it is like a kind of final thermometer of performance or performance. That is, if I manage to reduce the CPA, it will mean that (taking into account that other variables remain the same) these are working, since with a lower investment I get an acquisition.
• plan investment: Imagine that from experience or history you already know the average CPA of a client or a sector. If that customer tells you that they are targeting X sales, you just need to multiply this target by your estimated CPA to give them a realistic data-driven spend estimate. Calculating the investment in Google Ads is one of the most important steps to achieve the established objectives.
• draw conclusions and learn: As I mentioned in point one of this section, the CPA helps you to control your campaign. But we go further, it helps you to improve your google ads campaigns. If you have several campaigns or ads with the same objective (sales, registration, etc…) and you see that some of them have the lowest CPA, you will be able to understand that they work better. From here you can adjust your future ads or campaigns based on the ones with the best CPA or cost per acquisition.

Target CPA bidding strategy in Google Ads

The cpa bid strategy It’s perfect for both small businesses and startups looking to increase conversions and leads in a short period of time.

With Google Ads you have different types of bid strategy and one of them is known as target CPA bid strategy, which is part of the well-known Smart Bidding or intelligent bidding strategies. Target CPA bidding is a Smart Bidding strategy used in Google Ads.

With it you define the amount of the target acquisition or action and Google Ads manages your bids to try achieve the highest volume of conversions or acquisitions, respecting the maximum cost of those conversions, be it a purchase, a phone call, a download or another translation.

Types of ads in which the Cost per Acquisition applies

The ad types which are most used in Google Ads CPA Strategy are those that use the following conversion models:

• Make a purchase.
• Subscribe to a service.
• Request information for a database offering something in exchange (downloadable content, discount code, etc).
• Obtain information from surveys.
• Sign up for free trials.

Recommendations when using the target CPA bidding strategy in Google Ads

• Have a history of conversions. If you don’t have CPA data, don’t do it. The best thing is that at the beginning of the campaign you get an interesting volume of conversions and then move on to this.
• Keep it real: If historically your CPA is 30 Euros and you set a target CPA of 10 Euros, the campaign will not work because the CPA cannot be lowered that much with this bidding strategy. Try, for example, to take the history and reduce it by, for example, 10%. If your CPA was 30 euros, try for example to put 27 euros.
• do tests: I recommend that you test with different target CPAs to see how each campaign performs.
• Be patient: As always in online marketing, advertising is a virtue. This is not hitting a button and suddenly changing the Cost per Acquisition of your campaigns. It takes time.

Other considerations: The campaign using this bid strategy cannot have a shared budget with others. And also super important and basic, you must have the conversion part well configured.

How to reduce the CPA in Google Ads?

We have several articles talking about

There is a very extensive list of elements that improving them will allow you to get a best Cost per Acquisition:

• Expand negative keyword listings.
• Make bid adjustments based on Cost per Acquisition for:
  • Keyword
  • Time of the day
  • Weekday
  • Audience (age, gender, behavior or interests).
  • ad group
  • A/B test of ads
• Try to improve the quality level to get better CPC and greater visibility.
• Decrease the CPC (lower cost per click, more clicks with the same budget and therefore lower CPA).

Other things you should keep in mind about the CPA

The concept of CPA in Google Ads You can use it for any ad network, not just Google Ads.

Also in we can talk about CPA just like in , etc… In fact, if you do a set of online marketing actions with an acquisition objective, you can talk about the final Cost per Acquisition of your campaigns or your actions.

Put a Target Cost per Acquisition at the beginning of your campaigns is one of the best things you can do. If we already start with a target figure on the horizon, from the first moment we will have a compass that will help us to understand how our campaigns are performing. From experience there are times when we do not know what is our target CPAin this case you can try to make calculations based on the prediction of CPC or cost per click and the conversion rate of the website or landing that you are going to use.