CPA Marketing – What is it?
Unlike traditional methods, where payment special database is made for impressions or clicks, the CPA model assumes payment for specific actions: purchases, registrations, etc. The main advantage of CPA is its focus on results: the advertiser pays only for achieved goals. This significantly increases the efficiency of advertising investments and allows for rational use of the budget.
Determining the cost per action
To determine the cost, you need to divide the total costs of the advertising campaign by the number of completed target actions. Let’s look at how to calculate CPA using a specific example.
Let’s say you own an online electronics 3 good reasons not to use 100% automatic moderation store and you’ve launched an advertising campaign to promote a new smartphone model.
- The total advertising budget is 20,000 hryvnia.
- Number of completed purchases (target actions) – 125.
The CPA calculation is as follows: 20,000 / 125 = 160 UAH. Thus, on average, each sale (conversion) cost you 160 UAH.
You can also determine the CPA indicator not manually, but using special services, for example, Google Analytics.
How to reduce the cost of a target action
Of course, every business wants the cost aero leads per action to be low. To achieve this, there are two main approaches:
- Increasing advertising efficiency. For CPA marketing to be effective, it is important to ensure maximum relevance of ads to user requests and interests. This will attract a more interested audience.
- Increasing conversion on the site. To do this, you need to eliminate all technical problems that may prevent the user from performing the target action. You should also analyze the user experience and make sure that all the information needed to make a decision is understandable and easily accessible.
To improve business profitability, regularly evaluate and optimize both aspects.