The Beginner’s Guide to Cost Per Acquisition (CPA)

In the world of paid acquisition, clicks can seem like the holy grail. However, if you really think about it, one click is the only way to see if people get to your content. They do not reveal whether they stayed or not.

But how do you know if your content is engaging and emotional enough to convince your audience to stick around and ultimately buy your product or service? One metric that arguably best indicates this is conversions. If your creative convinced someone to download or even buy something, it was worth consuming.

The best way to measure the conversion capabilities of your content and thus its response in your advertising campaigns is the cost per acquisition. Read on to learn more about what exactly it is, how the calculation formula works, how the bidding process works, and what principles apply to creating creative and compelling ad copies.

Cost per Acquisition (CPA)

When brands choose the cost-per-acquisition pricing model when advertising on online advertising platforms, they pay for each acquisition, such as: B. a sale or a form submission that generates your advertising campaign.

Most acquisition marketers prefer the cost per acquisition pricing model because they can set their definition of an acquisition before they start advertising and only have to pay when their desired acquisition or action takes place.

Cost per acquisition bid

The cost per acquisition auctions are not the typical antiques auction. Advertising platforms like Google want to level the playing field when it comes to leveraging the size of their reach. Instead of the highest bidder always winning the auction, the bidder with the highest ad rank always wins.

The AdRank is calculated by multiplying your maximum cost per acquisition bid by the Quality Score of your ad. This is calculated by measuring the relevance of your page to the keyword, user experience and click-through rate. This means that just because they have the largest ad budget, companies can’t get the top rankings for every keyword they want. Your content needs to be engaging.

Google AdRank calculation

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Google wants to encourage the best advertisers to promote the best content on their search engine results pages. Therefore, they reward high quality ads with higher ad placements and lower cost per acquisition.

With that in mind, they also want to discourage bad advertisers from promoting bad content. As a result, advertisers with low quality scores typically only get a high ad position if they pay a high cost per acquisition bid. If you want to cut your cost per acquisition bid, you have to be content with bending down at the bottom of the ad rankings.

To get as many conversions as possible within the limits of your advertising budget, you should use Google’s target CPA bidding. Target CPA Bids use machine learning to analyze your campaign’s historical conversion data, recommend an optimal average target CPA, and automatically optimize all eligible bids to meet the average target CPA you got for all of yours Set campaigns.

When using Target CPA bidding, some of your conversions may cost more than others because your Quality Score or the competition in your ad auction may fluctuate. However, Google will endeavor to keep your cost per acquisition as close as possible to your average target CPA.

Cost per acquisition formula

To calculate the cost of your ad campaign per acquisition, take your total ad spend and divide it by the number of acquisitions generated.

This is how you optimize your costs per acquisition cost

Since your Quality Score, which is a measure of how positive and relevant an experience your content is delivering, is the most influential determinant in securing a top ad ranking and generating more conversions, this is the best way to Optimize your costs per acquisition costs are convincing ad and landing page copies.

When you sit down to write an ad or landing page copy, your goal should be to write something so fascinating that it attracts the attention of a distracted millennium smartphone in hand and a slice of pizza the other sits in one hand in front of the television.

How can you convince your audience to ignore that pizza, click your ad and convert on your landing page? Check out this three-step process to create compelling ad and landing page copies.

1. Awaken your audience’s curiosity

A little intrigue is enough for marketing. Humans are biologically motivated to examine our world instead of reacting to it. And when you can arouse enough curiosity in your audience that they can’t help but satisfy, they’ll click on your ad. So don’t reveal too much about your offer – make sure you highlight the benefits clearly and convincingly.

2. Sell a feeling

Psychology tells us that emotions determine our behavior, while logic justifies our actions after the fact. Marketing confirms this theory: people associate the same personality traits with brands as they do with people. Choosing between two alternatives is like choosing your best friend or someone significant. The people with whom we want to live our lives make us feel something.

This is also the reason why listing the features of a product is a lousy attempt to convince. Functions only address the logical part of your brain that science believes isn’t driving action nearly as well as the emotional part of your brain. So get not only creative with your copy, but also get emotional.

3. Design a simple but compelling landing page.

Just because you caught someone’s attention with your ad doesn’t mean your job is done. You still need to create a compelling landing page that clearly shows the value of our offering.

To do this, you should pique your audience’s curiosity with an intriguing headline and subheading, and remove external links from your landing page so visitors can only exit your paid acquisition funnel when they exit or convert, and test out videos that can Explain the value of your offer in a more engaging way than text can.

If you want to learn how HubSpot creates landing pages that convert at 35% rate, check out this blog post.

Track conversions instead of chasing clicks.

Marketers will track vanity metrics until the end of time, and you may feel pressured to do the same, especially if your coworkers are yelling about their astronomical growth in views or clicks.

However, if you ever feel tempted to get on this train, remember that the goal in marketing is to convince someone to take the action you want. So encourage your brand to resonate with your audience – that’s the thing that actually keeps people on your content and calls on them to action. And make conversions, not clicks, your carrot.

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