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Ask The Marketing Experts: What Is CPA In Digital Marketing?

June 24, 2022
September 27, 2023

Ask The Marketing Experts: What Is CPA In Digital Marketing?

Red Shark Digital

“Alexa, what is CPA in digital marketing?” Simply put, CPA, or cost-per-action, is the average amount you, the business owner, pay for one customer to take certain actions in your marketing campaigns. When it comes to Google ads Greenville NC, your CPA can measure the cost of various steps the customer might take, like clicking to learn more, filling out a form, downloading a resource, purchasing a product, or signing up for a newsletter or service. For example, when searching for marketing agencies near me, you are served an ad for Red Shark Digital, where you can submit your email to receive a weekly marketing newsletter. In this case, RSD can test the performance of that ad based on the CPA. Calculating the average CPA is determined by taking the cost of running the ad and dividing it by the number of emails collected.

Best Practices

  • You can use Google’s Quality Score diagnostic tool to identify where it might be beneficial to improve your Google ads Greenville NC, landing pages, or keyword selection based on how well your ad quality compares to other advertisers. Quality Score is calculated based on the combined performance of 3 components:

1. Expected clickthrough rate (CTR): The likelihood that your ad will be clicked when shown.

2. Ad relevance: How closely your ad matches the intent behind a user's search.

3. Landing page experience: How relevant and useful your landing page is to people who click your ad.

  • If the goal of a campaign is conversions, setting a target CPA is recommended by the Google ads Greenville NC experts at Red Shark Digital. The tactic of setting a target CPA to the maximum amount you want to pay per action and then optimizing accordingly is best practice for your Google ads management efforts.
  • Speaking of optimizing accordingly… To stay on top of your digital ad game, you must constantly monitor your campaigns’ CPA. Here are a few factors to keep an eye on:
  • Competition: High-traffic keywords will cost more to target—it’s the nature of the beast. Add some lower-traffic keywords to the mix of your current Google ads Greenville NC campaigns if they start inflating your CPA.
  • Targeting: If you don’t target the right audience, they’re less likely to look at your ad, leading to lots of wasted impressions and money for little to no action taken.
  • Tracking: You might also see a higher-than-expected CPA when you have more conversions than you’re actually counting when calculating CPA.

Ask The Experts: Red Shark Digital | Marketing Agencies Near Me

As a business owner, CPA is an important indicator of your current marketing strategy's effectiveness. To stay ahead of your competitors, reach out to Red Shark Digital, one of the top marketing agencies near me when it comes to running Google ads Greenville NC - Our marketing experts will help you to further understand what CPA is in digital marketing.

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