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CPA, or cost per action, is referring to the money that you spend for each customer through an ad platform. CPA is also known as customer acquisition cost or CAC. For example, if you ran a Google ad campaign that has a budget of $500 and you received seven customers from that ad, using our CPA calculator will help you understand how much you spent to obtain each of those customers. Essentially, it tells you how much you’re paying for every customer who converts through a paid marketing channel.
As for any metric, it is hard to have an ideal benchmark across all industries as each industry is unique. However, to give you an idea, a general benchmark for CPA for ads is around $60. You should use this benchmark to assist you in determining the quality of your specific CPA ad campaign in order for you to make changes to your campaign accordingly.
Using our CPA calculator is ideal when you need to calculate a CPA for your ad. Below are some reasons why using a free CPA calculator can help:
When using the CPA formula to calculate your CPA, it is easy to make a single mistake that can make your numbers and metrics inaccurate. However, when you use the CPA calculator, your CPA metric will come out correct every time. There is no need to worry if the numbers are correct as there is no margin of error with the calculator and it does all the work for you.
The cost per action calculator will give you your CPA faster than you could do it manually. When it comes to your time, you don’t want to waste it on manually calculating metrics that can be calculated for you. Our free CPA calculator can help you find your CPA for your ad campaign within seconds!
When you calculate cost per acquisition, it will help the performance of your ad campaigns. After determining your CPA, you’ll get an idea of how your ad campaign is performing. Here’s what different CPAs tell you about your ad campaign.
For instance, if you have a CPA that is more than what your customer would usually spend on a single product in your store, this means you need to improve your ads. An example of this would be if your CPA is $80 and your product typically sells for $30, you’re likely paying too much to convert that consumer into a customer.
If you instead find that your CPA is less than what a customer usually spends on a single product in your store, then this tells you that your ad campaign is doing a good job. This CPA means that you’ll likely always make a profit from your customers since you’re not paying a lot on the ads it takes to acquire them.
When you run an advertising campaign, you want to know what affects your cost per acquisition. There are several factors that affect the quality of your ad and how it plays a critical role in influencing your CPA. When you continue to have poor quality ads, you will remain having fewer customers.
For example, if you have an ad budget of $500 and only got 5 customers to convert, your cost per action is $100 per customer. Whereas, if you got 50 converting customers with that same $500 budget, your CPA will be $10.
Below are some parts of your ad that can affect your cost per acquisition:
The image that you portray to potential customers can give off the level of professionalism and trustworthiness that your business holds. This affects your CPA because you can’t convert users into customers if they don’t click on your ad, and it’s unlikely that they’ll trust your brand enough to click if you have a crappy product image.
Without a proper call to action button that entices users to learn more or to purchase your product, then users will have no reason to want to click on your ad. It’s critical to include a CTA button on your ad that stands out and excites the users to click. A CTA button affects your CPA by not making it easy for users to take the next step in becoming a customer, then they most likely won’t. The purpose of CTAs is to help guide users to the next steps in the sales funnel, and without a good one, you won’t get the results you want.
Ad targeting is crucial in order for your ad to be successful. If you don’t target the right audience for your business, then you won’t receive enough conversions for your ads to be profitable. Ad targeting makes it easy to put your ads in front of the right eyes at the right time, which means more conversions and a lower CPA.
Ad targeting affects you in the way that If you put your ads in front of the wrong audience, they’re less likely to convert. By targeting the wrong audience, it can lead to higher ad costs which then drives up your CPA.
After users click on an ad, they end up on a landing page. There are several components that make a landing page a successful part of the funnel or not. These can be things such as images of the products, product descriptions, or materials used. This is just some of the reasons that your landing page may not be as optimized as it needs to be.
Strive to give users all the reasons they need to purchase your product since your landing page is typically your last interaction with a customer before they decide to purchase or not. Your landing page can make or break a sale, and in the end, it can increase or decrease your CPA. If users don’t convert on your landing page, that’s one less customer, and your CPA will increase. You’ll end up with how much you spend, in total, on your ads. When this number goes up, it affects your CPA since the cost of your ad campaign is part of the puzzle. Don't stop here though, there are more useful PPC tools for you to explore!