The Ultimate Guide to CPA Marketing
Every business owner knows that obtaining leads is the key to ensuring the growth of your business. After all, what is a business without any customers?
Luckily, there are multiple tactics that help in capturing qualified leads and converting them into customers quickly. And you don’t need to drain your savings either!
In this guide, the tactic we are going to discuss is CPA marketing.
Grasping the CPA marketing basics will not only provide you with a cost-effective method of generating more leads but will also help you know how well your business is performing.
So, let’s dive into details to find out what CPA marketing is and how you can use it to make informed decisions when it comes to marketing.
What Is CPA Marketing?
CPA or Cost Per Acquisition means how much your company has to spend in order to get a single customer to complete a conversion process, such as a purchase.
CPA marketing is all about using your Cost Per Acquisition as your Key Performance Indicator (KPI) and optimizing your marketing strategy around decreasing your CPA.
Why Is CPA Marketing Important?
CPA marketing is important because the lesser your CPA, the less you will be spending on your marketing, and the more you will be saving for your business.
It is quite evident that every business owner wants a high return on ad spend (ROAS) but to accomplish that, it is necessary that you first invest in the right marketing tactics.
The goal of your marketing strategy should be to have a CPA lower than your product cost. This will make sure you get the most return on your investments and lead your business on the path of success.
Several marketing platforms have campaigns built to accomplish a specific cost per acquisition. For example, Google lets companies reach a broader range of audiences on the basis of their ad rank instead of their bid.
With enough data and information in your ads, utilizing one of these automated campaigns is not a big deal.
However, even without data, there are multiple ways to achieve an ideal CPA within a few steps. Platforms like these allow businesses to reap greater results by just altering some things.
Apart from these, there are a few ways outside of these platforms that you can utilize to optimize your ads organically, which will help in boosting your ad rank and lowering your CPA.
Ways to Optimize Your CPA Marketing Ads
- Using a marketing funnel
Using a powerful marketing funnel that helps nurture leads through the buying cycle can help you gain more qualified leads and influence them to convert into customers. It will help you lower your CPA and take away the strain of spending too much to acquire customers for your business.
- Make engaging ad content
The chances of people clicking on your ad increases when your ad can spark their interest. You need to make ads that make your audience curious but make sure you are not giving away too much information about your offer.
Something like a short, engaging video that leaves them in suspense and tempts them to click the ad to know more. Whatever you do, make sure to tell them about the benefits of your offer to motivate them to take the desired action.
- Using the right keywords
The keywords you are using plays a significant role in determining your ad’s rank.
Including keywords relevant to your industry allows the search engines to notice your ad and rank it higher in the SERPs with a better quality score.
This is simply because search engines like Google want quality content, and so they favor ads with higher quality scores and rewards them with better rank positions and lower CPA.
- Don’t just coldly sell your products or services
Your ads should not be all about selling. In order to make your ads appealing and get more clicks, you need to go beyond just selling your products or services. In simple words, today, nobody likes to be coldly sold to. Therefore, it is necessary to ensure that your ads are not just logically appealing but also emotionally appealing to your audience.
When your ads are able to stimulate emotional appeal, they will be able to connect with your audience better and eventually get more clicks. It’s because emotions trigger the need to take action more than logic does. With this, your ad’s performance will improve, and your CPA will decrease.
- Build a landing page for your ads
Even though you get leads to click on your ads, you need them to convert in order to gain new customers.
Building a landing page, especially for that purpose, will help in boosting your conversions. Just like your ads need to have engaging content and information, it should also have links that do not stand in the way of your visitors converting into purchasing customers.
For example, build your landing page in a manner that only allows the visitors to leave after conversion. This is a mere example. The goal is to create a landing page that helps your ads in converting your traffic.
Things to Consider Before Relying On CPA Marketing
So far, CPA marketing appears to be quite enticing, isn’t it? That’s excellent.
Although, before you dive right into CPA marketing, there are a few things you need to understand and consider first.
Grasping these will help you understand CPA marketing in-depth and how it will benefit your business better.
We don’t want you to start with CPA marketing without proper knowledge, so let’s discuss the main points before you get started with it.
- Platforms
A few platforms have automated CPA settings that you can use with your ads. Although, for these automated strategies to work, you need to have certain tracking codes on your websites for every platform you are using and every conversion action. You also need to have ample information in your account. If you don’t have it, you can opt for a non-automated method.
Google is the most popularly used platform for CPA marketing, especially because it is already the most commonly used search engine. But that does not mean it is the only platform you can/should use. There are other powerful platforms such as Facebook that you can utilize to run your automated ads.
Google has an automated smart bidding strategy called Target CPA, which optimizes your bids by utilizing archival data from your Google Ads account along with other data points. It places the bid low enough to hit your target CPA.
Let’s assume your company produces energy drinks. Now you want your average CPA to be $10 and target the keyword “best energy drink.” But this creates a problem.
The average cost-per-click (CPC) of the “best energy drink” is $10.50. Now you might be thinking that $.50 isn’t that big a deal. But you must remember that even if 100% of your ad clicks convert, you will still be $.50 over your target CPA.
This means Google won’t be displaying your ads. Now that’s terrible, especially if you spent all that money in an attempt to boost your online visibility.
Google’s Target CPA bidding strategy works best when you already have data in your account. Having said that, we advise you to have a fixed minimum allowance of 15 conversions or purchases in 30 days before getting started with Target CPA.
Just like Google, Facebook has a Cost Cap bidding strategy. It lets you fix a maximum amount that you are happy to spend on any conversion action, and it will spend that only.
Similar to Google’s strategy, Facebook also extracts data from your Facebook account and other data points to optimize your ads’ performance.
When it comes to hitting your maximum bid on your ads, Google allows a little bit of leeway. But Facebook doesn’t. You can’t exceed it any further.
But for Facebook, it is recommended to have a bit more information in your account before initiating ads. To allow Facebook’s Cost Cap bidding strategy to optimize your ads, having 50 conversions in a week will work wonders.
Now, it might sound a bit difficult or unreasonable but remember, conversions do not have to be purchases necessarily.
- Segmenting Your Audience
At the beginning of this section, we discussed a little how using a marketing funnel can help you acquire more qualified leads and lower your CPA. But let’s face it, it is improbable that people make a purchase from a brand they just got to know about.
This one goes without saying, but it is vital to have several smaller CPAs to get your visitors to fulfill certain actions instead of just having one overall CPA goal.
Every stage in the customer journey should have defined CPAs, which will help you in tracking conversions along the process. Needless to say, but all of these must be less costly than your overall CPA goal.
When you are advertising, you need to break down your campaign into separate target audiences with separate budgets and target CPAs.
However, before we go any further, it is important to understand that CPA is a ‘law of averages,’ meaning we also need to address the connection between CPA and conversion rates.
The conversion rate is the percentage of visitors who convert on your landing page.
Note: Cold audiences will always have a higher CPA as compared to the warm or hot ones. Thus, make sure to segment your audiences properly and provide a logical CPA for each ad group.
- Frequency
Frequency shows how often people are seeing your ads.
If the platform you are utilizing does not have adequate information or your target CPA is too low, then it will continually display your ads to the cheapest audiences during the cheapest times.
A high frequency with low CTRs (click-through-rates) shows that your audience is too small. On impression-priced platforms such as Facebook, your CPA will be too high. In situations like these, turn off your ad and take a look at it. If you are running multiple ads simultaneously, you can turn off the one with a higher CPA or maybe eliminate higher-cost locations. This will help in reducing your CPA.
Conclusion
CPA marketing is an excellent strategy to keep your profit margin as well as total revenue up. When you utilize it in the correct way, all you need to do is:
- Utilize automated strategies whenever and wherever applicable
- Segment your audiences accordingly
- Observe your ad frequency
By keeping all these points in mind and following this guide, CPA marketing will help you lower your CPA efficiently.