who is looking for content , you must have already heard of various acronyms such as CPC, CPM, ROI and CPA. The latter represents the cost of customer acquisition and is one of the most important for marketing professionals.
It includes paid traffic, therefore, the purchases that customers make become a metric. In other words, something that can be measured from a paid campaign.
In this way, it is possible to know if the information was convincing and also if it had a significant impact that interested users and led them to buy a product or service.
Here we are going to talk more about this topic and show you how it came about, what the differences between the acronyms are, and how to calculate and optimize the CPA of a campaign.
What is the CPA or Cost per Acquisition?
The CPA is an advertising system offered by Google Ads to those who use . It is only necessary to pay something when a conversion occurs, that is, when a purchase is made.
Instead of paying per click, as in the or the value of a thousand ad views (CPM), the advertiser only pays when they get results with clicks.
It can be calculated from campaigns with different objectives such as:
- Complete a form;
- Sell a product or service;
- Download an ebook, infographics and others;
- Sign up for a webinar or event;
- View a video.
One of its biggest advantages is automation because, based on your conversion history, Google suggests the average CPA value paid per conversion.
If the seller does not agree, you can stipulate the maximum value you are willing to pay. But, it is important that you know that decreasing the CPA value can modify the positioning that you have previously obtained.
So far you already know a little about CPA: its function is to show the value of the investment necessary to produce the best results for your business.
What is the difference between CPA, CPM, CPC and CPL?
There are many metrics and that can generate doubts, especially if you are starting your day. Those who use Google Ads, one of the most popular search engines in the world and an essential tool, must know all the acronyms and know how to use them.
These are the most important metrics to track the results of your campaigns:
- CPA – Cost per Acquisition;
- CPC – Cost per Click;
- CPL – Cost per Lead;
- CPM – Cost per Thousand Impressions.
The CPC is the value that is paid for the number of clicks on the ads you created. In each campaign it is necessary to define the maximum CPC (maximum launch of Cost per click). That is, the maximum value you can pay for the interaction.
By choosing this option, you will be charged only if the user clicks on your link.
The CPM is the cost per thousand impressions. Indicates the value that you will have to pay for the ads to be shown to users a thousand times, on the timeline or on a page of a website.
In the CPA, the subject of our article, you are charged only for the ads that result in conversion, as we have already said. We also talked about the possibility of casts, but you can only use them if the campaign generates more than 15 conversions in the last 30 days.
Finally, the CPL represents the Cost per Lead. This is a very variable metric, since it considers the type of business and the communication strategy. Therefore, when calculating the CPL, do not take other businesses as a base, okay?
How to calculate the Cost per Acquisition?
By now, you’ve already understood the importance of this metric for performance and ad professionals, right? Despite its great relevance, the calculation of the CPA is very simple. Simply divide the value of the investment by the amount of sales made.
With this formula:
CPA = INVESTMENT MADE / TOTAL SALES
For example: an entrepreneur in the food niche wants to promote a new product from his bakery. So he decides to invest a thousand dollars in Google Ads. This investment will help attract new consumers.
At the end of the stipulated period, you achieved 50 conversions, totaling a CPA of 20. That means you need to spend $20 on Google ads to get 1 order for the new product.
How to improve the CPA of a campaign?
You already know the basics about CPA, and if you usually create paid ads, but your results have not been so positive, this topic is for you. We selected 5 excellent tips to optimize a campaign and achieve good results. Do you want to meet them?
1. Arouse the curiosity of your audience
An ad with good text is capable of creating a bit of mystery and arouse the curiosity of consumers. Therefore, use triggers to stimulate the click.
And, of course, your product (or service) must deliver what it promises in the ad. Therefore, the text requires dedication. One piece of advice is not to reveal the entry offer. Remember: show the difference and the transformation that your product provides.
2. Add value to your offer
add a to the offer is a very important ingredient, because each user perceives a different value. So you should not copy what your competitors do. Here, the goal is to gain a competitive advantage, as you add more value to your business.
For that, you have a few options: display trustworthy website research on the landing page, interact with users, study customer reviews of competitors.
And don’t forget to be honest about what you offer, because speaking well of your product and not solving the problem as promised will be seen as misleading advertising and will compromise the reputation of your business.
3. Put effort into your landing page
Did you get the user’s attention? Excellent! However, the work does not end there.
Now you need to present your product in detail and convince the customer to buy it. You can do it through a landing page, a type of page with these elements:
- Intriguing title and subtitle;
- Link to buy;
- Real images, of good quality and striking, of the product or service;
- Video (if necessary);
- The value of the offer;
- Description of the offer and a lot of persuasion to convince the reader.
If you want to know more about focused on conversion, read our post on the subject.
4. Segment the public correctly
Audience segmentation is extremely important to get a good CPA. After all, you don’t want to pay more to attract users who have no intention of buying your product, do you?
To carry out proper segmentation, understand your target audience and create a buyer persona to help you set up your campaign in Google Ads.
5. Work on sales objections
Some leads have barriers when making some purchases — something very common in commercial transactions — that can prevent conversion. study some more common:
- That doesn’t work for me;
- I never heard of this this product;
- I don’t need that now.
One of the best ways to deal with objections is to get to know your audience and understand them so you know how to break down those barriers when they arise.
Optimize your acquisition cost whenever you can
Did you understand why the CPA or acquisition cost is a very important tool to boost your online business? Even if you don’t have experience with paid traffic, you can still invest in Google Ads. But do not stop studying or understanding your audience.
Remember that you can also optimize your CPA! Segment your audience, bet on a good advertising text and create a functional landing page.
Want to find out more about how paid traffic works? We have an ebook with everything you need to know. Click on the image and download it now.
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