The ultimate goal for digital marketers is to keep ad spend low while driving the highest possible conversions. Although PPC can be extremely effective, it can also deplete a marketing budget if you don’t find ways to cut costs while maintaining a high ROI.
One of the most important metrics to monitor in PPC is the cost per acquisition, which measures the total cost of acquiring one paying customer on a campaign.
We previously discussed five methods for lowering your CPA:
Reduce your bids.
Look for more specific keywords to target.
Boost your Quality Score
Examine your offer types.
Qualify your ad text.
In this section, we’ll go over five more ways you can improve your account. Ready? Let’s get started.
Examine your locations
Non-converting locations are one of the most common causes of wasted spend. While it may be tempting to target as many locations as possible, doing so often results in your ads being shown to uninterested audiences and paying for unqualified clicks. By inspecting your geographical data at a granular level, you can be much more methodical about location targeting. This way, you’ll be able to identify opportunities to immediately reduce wasteful spending.
Simply navigate to your Google Analytics dashboard and look at the Goal Conversion Rate for each location. For example, if you’re targeting the United States, you can identify the states with the highest and lowest conversion rates.
Wyoming and Vermont have the highest conversion rates for this goal, but California is the source of the most traffic. In this case, you can delve even deeper into the data by looking at the best and worst converting cities or metro areas to gain more insight.
Once you’ve identified your lowest-converting locations, you can either turn off ads entirely or drastically reduce bids in these areas.
Always maintain high-Quality Scores
Regardless of the debate over the role of Quality Scores in PPC, we continue to see evidence that high-Quality Scores are important not only for better-performing ads in general but also for lower CPAs. Larry Kim has argued that optimizing for Quality Score is the same as optimizing for CPA, and he provides clear evidence to back up his claim by analyzing CPA data from hundreds of Rankzoid client accounts. Larry discovered that as the quality score increased, the CPC decreased, as shown in the diagram below.
Even without a graph, it’s easy to see why higher Quality Scores result in lower CPAs. The Quality Score evaluates the effectiveness of your ads, keywords, and landing pages. Higher scores indicate that your ads are relevant, so they are shown to more people and, on average, you can enjoy lower CPC. Because the CPA is calculated by dividing your costs by the number of conversions, you’ll have lower costs, higher conversions, and, as a result, lower CPAs.
So, how do you raise your quality score? The key is to improve your ad copy, ensure your landing page delivers on the promise of the ad, and tighten your keyword groups. This brings us to the next method for lowering your CPA.
Try out smart bidding
Smart bidding is an automated bidding strategy that uses machine learning to optimize your ads based on predefined goals. Google Ads’ smart bidding options include target CPA, target ROAS, search page location, and enhanced CPA.
When you choose Target CPA, for example, Google Ads tries to deliver leads at or below the CPA you specify. This is especially useful if you’re on a tight budget. You should have at least 30 conversions in the last 30 days before using Target CPA and 50 conversions in the last 30 days before using Target ROAS for the best results from smart bidding.
Make use of the “IF” function
“IF functions allow you to insert a specific message in your text ad when a condition is met, and a default text when it is not,” according to Google. This tailors your ads to each search and makes them more relevant to potential customers.”
The supported targets allow you to tailor ads by device or audience. As a result, users see slightly different messages depending on their device (mobile or desktop) or the audience category (e.g., cart abandoners vs first-time visitors).
Finally, don’t “set it and forget it.”
Far too many marketers approach their campaigns with a “set it and forget it” mentality. But this will not work because PPC is a constantly changing field. You must constantly test and optimize your campaigns until you find the right balance.
You can effectively lower the CPA of your PPC campaign by eliminating or bidding less on non-converting locations, maintaining higher Quality Scores, and implementing better ad structures. If you’re feeling even more daring, try smart bidding and leveraging the IF function to make ads more compelling. Regardless of which strategies you choose, make sure to check in on a regular basis to monitor and continue to improve the performance of your account.
