When measuring your campaign’s performance, I’m sure that the most important question on your mind is:
“Is this campaign profitable?”
One of the best ways to ensure that you are getting a return on your investment is to make sure that your campaign’s cost per conversion (CPA) is below the revenue you receive from each client that converts. There’s no point in having a campaign to sell phone covers for $20 each if it takes $50 to make 1 sale! This is why you should pay close attention to your CPA when you optimize your campaigns.
Here are 3 proven methods to lower your PPC campaign’s CPA:
If your cost per conversion is too high, it may mean that you are spending way too much on each click. The following formula is how CPA is calculated:
Total Cost/Total Conversions = Cost per Conversion (CPA)
When we talk about ways to reduce our campaign’s CPA, one of the most obvious methods is to increase the amount of conversions. However, far too many people ignore the cost element of the formula.
It’s a common occurrence for campaigns to have a range of expected conversion rates. There’s always work that can be done to improve them, but if your historical organic and paid traffic convert at steady rates and you’re lacking the resources to do conversion optimization, your scenario may look like this:
($3 CPC x 10 clicks) * 5% conversion rate = $1.5 CPA
Depending on the nature of your business and the behavior of your clients, a Call-only campaign could potentially be a great fit for you.
If your business is an emergency service, sending your potential clients to your website is probably not the best idea when they need your help now. Other times, a potential client may want to speak with you before making a payment to hire your services. They are looking to do business with someone they can trust.
Call-only ads are a special type of ad format directed only at mobile devices. Unlike other ad formats, they do not send users to a website when they are clicked. Instead, they immediately start a phone call to the phone number on the ad. They also feature a call button.
An example of a Call-only ad.
It’s important to note that you should only be running your Call-only ads during your hours of operation. You don’t want to be showing your ads at times when you won’t be available to answer the phone not just because it’s a waste of your advertising budget, as you won’t be able to take advantage of the leads you receive when you’re not answering the phone, but also because it creates a negative perception of your business to those potential clients whose needs weren’t met when they needed you.
One of the most common causes of wasted spend is non-converting locations. Locations that do not convert are one of the most common causes of wasted ad spend. I know that trying to target as many locations as you can to reach as wide an audience as possible is tempting. However, too broad a targeting approach often results in showing your ads to audiences that are not interested and paying for irrelevant clicks.
I recommend that you look at your locations at a more granular level and check the geographical reports to see what locations are wasting your spend. This way, you can exclude them and focus your budget on the locations that are bringing you results, resulting in an immediate reduction in wasted ad spend and an increase in CPA.
So there you have it! Now you have 3 important areas to focus on to work on reducing your CPA and increasing your return on your Google Ads campaign. Happy optimizing!