Marketers talk a lot about getting customers, but not so much about what it costs.
Nowadays, achieving growth and gaining new audiences solely through organic search is tough, so most marketers supplement these with pay-per-click (PPC) ads. Paid ads are a smart move, but you’ve gotta invest in them the right way. Otherwise, you’re just throwing money right out the window.
How do you know you’re getting the best spend on your ads? Cost-per-action (CPA) is one way to measure this. It’ll give you a bird’s-eye view of what you’re paying to get results.
Let’s explore what CPA is, how it works, what causes a high CPA, and what you can do to lower it (to get more bang for your buck).
What is Cost-Per-Action and How Does It Work?
Cost-per-action (CPA) is the average amount you pay for a customer to take an action like:
- Filling out a form
- Downloading a resource
- Purchasing a product
- Signing up for a service or newsletter
In your marketing strategy, your CPA can measure the cost of any action a customer takes, so it’s flexible. For example, a CPA for your app could be a download, and a CPA for a magazine could be a subscription.
You might see some people define cost-per-action as the average cost for a conversion, but whether you can use those two terms interchangeably depends on what a “conversion” is for your campaign. For example, your main conversion metric might be a purchase, but what you’re actually trying to measure is your cost per landing page view.