One of the most common questions when advertisers learn more about this world is what is CPA in Google ads. The CPA, also known as Cost Per Acquisition or cost per sale, is a payment method that is established within online advertising. It is characterized because the advertiser only pays for each sale that is achieved through an advertisement. You do not have to pay to appear with a specific format in a place with many impressions or to reach a specific number of impressions. The only valid criteria to make the payment is the sale obtained.
A system that considerably limits the possibilities at the time that you receive money for advertising, but that guarantees a greater return in terms of sales. It is normally used to achieve an increase in the sales index in a short period of time and its pricing is something that always depends on the number of sales made.
The most common is that the advertiser indicates a price for each conversion that is achieved, multiplied by the total of operations obtained. Therefore, in the face of the web where the ad is hosted, the priority is to take the readers to make the purchase, either through additional campaigns or different strategies.
Cost by Acquisition is spread over many aspects, always within online marketing, and is one of the advertisers’ favorites, since it guarantees a higher return on the economic investment in advertising, unlike other formats such as the CPC or the CPM.
How does it work
The CPA serves as another model when developing online advertising campaigns. For the company that makes the announcement, it is a system that helps to maximize the money invested in advertising; for the advertiser, something that allows them to obtain benefits in exchange for the sales they get, as a kind of commission for the service granted.
Its purpose is to establish a different and much more efficient payment model, but above all with greater economic performance.
To calculate the CPA in a campaign, divide the total cost of the ad campaign by the number of conversions. For instance, in a campaign that has a cost of $ 2,500, 250 conversions have been obtained, so the cost per conversion would be:
CPA = 2,500 / 250 = $ 10
Purpose of the CPA
It is the average amount you are willing to pay for each conversion. The target CPA you define can influence the number of conversions you get. If you set a goal too low, you could lose clicks that could lead to conversions and, consequently, get a lower conversion total.
If your campaign has a history of conversion data, Google Ads will recommend a target CPA. This recommendation is calculated based on the CPA obtained during the past weeks. When you create another campaign, Google Ads will recommend a target CPA based on your account’s conversion data history.
When formulating a recommended target CPA, we will exclude the performance of the last days to account for conversions that may take more than a day to complete after clicking on the ad. You can use this recommended target CPA or define a different one.
Although it is one of the less used systems by the media when accepting advertising campaigns, knowing what is CPA in Google ads is important when it comes to maximizing the benefits to place an ad.
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