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Welcome to incognito money podcast How to Optimize Your CPA for Maximum ROI Your CPA, or cost per acquisition, is an important metric when it comes to deciding whether your marketing strategy is working or not. The problem is that it doesn’t tell the whole story of your campaign’s success; in fact, it doesn’t even tell you the whole story of your conversion rate. That’s why we need to understand CPA and how it relates to CPC and conversion rate in order to get the best ROI possible from our campaigns. What’s My CPA Right Now? Before you can optimize your CPA, you need to find out what it is. You might be paying $20 per lead right now, but if that number’s lower than your customer lifetime value (how much they’ll spend with you over their lifetime), optimizing your CPA won’t make sense. Find out what your current cost-per-acquisition figure is, and start there—even if it doesn’t look like it makes sense at first glance. What Do I Need to Change? CPC, or cost per click, is how much you pay when a user clicks on your ad. CPA, or cost per acquisition, is how much you pay when a user completes whatever goal you’ve set. To optimize your campaign, look at what you’re paying for each click and compare it with what you’re paying for each conversion. If one of these numbers seems really high compared to another one, that might be where you need to make changes. For example: if you have a $10 CPC but only have a $5 CPA, it might be time to reevaluate some things and adjust accordingly. Consider Ad Extensions Ad extensions are options you can include in your ad that provide more information or context about your business, such as a See all X products call-to-action button or a link to a custom landing page with even more information about your business. Many businesses choose to use ad extensions because they help convince customers that their company is trustworthy and transparent, which may lead them to make a purchase. Ad extensions also have low startup costs and are easy to use. Consider Bid Management Tools Most AdWords advertisers are using bid management tools, whether they realize it or not. However, there’s a reason why these tools exist: in order to get a high return on investment (ROI), you need control over your bids. If you have no control over your bids, you have no control over your return on investment. Implement New Bidding Strategies What is CPC? Cost per click (CPC) is how much you pay every time a user clicks on your campaign item. So, if your CPC increases, your CPA will increase. If your CPC decreases, your CPA will decrease. To maximize return on investment (ROI), start implementing new bidding strategies and testing them until you’ve found a strategy that works best.