4 Ways to Lower Cost Per Action (CPA)

Cost Per Action (CPA) is a critical Pay-Per-Click (PPC) marketing metric. It's the primary metric for controlling advertising costs for specific marketing objectives. More importantly, your CPA often indicates lead quality. A lower CPA signifies poor lead quality, indicating a poorly optimized PPC campaign.

Therefore, it's every marketer's dream to lower their CPA while maximizing conversion rates. You'd be in massive profits if you pull off both. This guide looks at a few practical ways to reduce your CPA without hurting your conversion rate.

Cost Per Action (CPA) is an online advertising metric and ad pricing model where the marketer is charged a specific amount per specified action, such as a click, form submission, or sale.

However, don't confuse it with Cost Per Acquisition which refers to the cost of acquiring one paying customer, or Cost-Per-Click, which accounts for all clicks, whether the site visitors convert or not.

The following are four practical ways to lower your Cost-Per-Action. Note that you may need all four to lower your CPA substantially.

The easiest way to reduce your CPA without spending over the odds is through thorough keyword research to unearth high-converting keywords at a fraction of traditional costs. We specifically recommend broad match and long-tail keywords.

In the hierarchy of keywords, broad-match keywords are at the top of the funnel, with phrase matches in the middle and exact-match keywords at the bottom. Therefore, broad-match keywords are the least competitive and most affordable. Thus, you can significantly lower your CPA by going heavy on broad-match keywords.

Long-tail keywords have a similar impact. They are much cheaper while guaranteeing steady traffic and conversions. Moreover, long-tail keywords offer a higher engagement than short and middle-tail keywords.

Answer the Public, Semrush, KW-Finder, and Growth-Bar offer excellent long-tail keyword research capabilities if you're wondering where to start your search. Ubersuggest is another wonderful option.

Besides refining your keyword research, you should consider finding ways to lower your bids. This can be a big challenge, given that the highest-converting keywords are often the costliest. However, there are a few ways around the problem. Specifically, we recommend Artificial Intelligence (AI)-backed PPC advertising solutions.

Advanced, AI-powered PPC bidding software programs have one major advantage of human-centered bidding – they can sift through millions of data points in real-time to determine optimal bid prices.

For instance, a typical PPC bidding strategy involves analyzing the following;

• Ad text options
  
• Cost per click
  
• Target user demographics
  
• Types of devices and OSs the users use
  
• The average time spent on your site
  
• PPC bounce rates
  
  

All these factors affect the cost per action (CPA). But, more importantly, most of them change in real-time. Therefore, manually tracking all six factors is impossible. Moreover, manual tracking is often riddled with errors and human biases.

That's where AI-powered tools like ANDATA come in handy. They analyze many more ad-pricing factors in real time and with fewer errors for more optimal bid prices.

According to the Google Ads website, Quality Score measures the overall user experience regarding your ads. You can find your score on your keywords report.

It asks a simple question – are your ads and landing pages useful to your customers? If not, expect a higher CPA no matter how much you refine your PPC strategy.

We recommend three steps to improve your quality score. First, improve your "expected" CTR. Expected CTR is the likelihood that someone will click on your ad. Fortunately, Google indicates the expected CTR before you publish your ad. Always aim for an "above average" expected CTR.

Next, work on ad relevance and landing page experience. According to Google, ad relevance is "how closely your ad campaign matches user search." More positive ad interactions signify a higher relevance.

Meanwhile, the landing page experience metric estimates the usefulness of your landing pages to people who click your ads. A higher rating often means the landing page meets visitors' expectations.

Finally, this is the area most marketers overlook. So many of us are focused on closing more conversions on tight purses that we forget that perhaps we're pursuing the wrong goals.

For instance, e-books are the name of the game when it comes to downloadable offers. Every brand has one on hand. However, have you ever wondered whether your target customers are interested in e-books? Are they excited to download one?

More importantly, suppose the bigger goal is to generate sales from your e-book downloads. Do you ever ask yourself how the e-book ties back to the sales journey? Have you mapped out the journey? Is it practical?

If not, you'll likely have an average Quality Score, leading to an unnecessarily high cost-per-acquisition.

Therefore, now is a good time to revise your conversion goals and rethink your offers. For example, instead of downloading an e-book, request your visitors to play an interactive game. Or offer a discount. Again, it's about finding what the customer wants.