What is CPA In Google Ads?

Hey, it’s Myles from Serendipityy.

This email is about a useful metric called cost-per-action (CPA).

I cover:

• It’s formula

• What it measures

• Why it’s important for you to measure

• Trends to look for in your Google Ads account

• 3 Actionable steps for you to improve your ROI today

Enjoy.

Formula

Total Cost ÷ Conversions

How Often Should You Measure Changes

Monthly.

This gives a more stable view of performance, avoiding misleading daily or weekly fluctuations.

What Is It?

CPA measures the cost of getting a conversion with a specific campaign or platform.

Why It's Important.

CPA tells you more about your attribution than whether your campaigns are working well or not.

As people get closer to purchasing, platforms get more accurate with attributing ads to conversions.

Therefore your CPA on campaigns that target very warm traffic (brand search) is going to look great compared to cold traffic campaigns (Meta Video). Because Google can attribute way more conversions to that campaign.

However, people converting in your brand campaign likely discovered your brand from your Meta Video campaigns, but because the customer journey is so long, Meta can't attribute the conversion to that campaign.

Because far fewer conversions get attributed to the Meta Video campaign, CPAs are much higher.

Therefore it's important not to compare CPAs between campaigns / channels that serve different purposes.

However, it is useful when looking at a single campaign / channel to tell you if it is becoming more/less efficient.

What To Look For.

Your top-funnel campaign CPAs and your brand search CPAs are usually for the same person.

The graphic below shows what I mean by that.

That's why when you introduce top-funnel YouTube campaigns on Google and Meta, you often see a reduction in your other campaigns CPA.

That's what you should look for when setting up top-funnel campaigns - how are the CPAs of all your other campaigns affected. If your top-funnel campaigns are effective, then they should decrease.

How To Use It

1. Assign campaigns / channels into 3 buckets, "top-funnel", "middle-funnel" and "bottom-funnel" depending on what traffic they are targeting.

2. Measure the average CPA over the last 3-months for each bucket. This can now serve as a benchmark CPA to improve for each stage of the funnel.

3. Remember, you're not trying to get your top-funnel CPAs to look like your bottom-funnel CPAs. You're just trying to lower them, while still making sure that your campaign is targeting top-funnel traffic.

Hope this email was useful. Reply if you have any Google Ads related questions.

All the best,

Myles

PS. If you’re running an eCommerce brand doing over $30k/month in revenue then you can book a free Google Ads consultation call here »