Help – My CPA Is Too High!

  • Posted by admin
  • On April 23, 2013
  • PPC, SEM,

From time to time I have to work with a client whose primary focus is achieving a specific CPA, and it requires a completely different approach to any other objective that you can be set. Here are some things that I look at when aiming for a required CPA.
Firstly you need to work out what a ‘Conversion’ actually is. One client I work with had five different conversion types set up in his account, but was completely unaware of it. There were 5 Goal Sets in Analytics, each with one Goal and all of them tracking the exact same function, but under different names. This meant that the CPA the client was actually achieving was five times higher than he thought it was! If you have multiple Conversions set up, what is the difference between them? Are Conversions being double counted, or are they all unique? Without knowing the answer to this, your whole Conversion Data is effectively useless.
Next, the Conversion cookie is active for 30 days. This means that if someone clicks on an ad on March 1st, but then actually converts on March 30th, the conversion will be attributed to the click on March 1st (providing that other ads were not clicked during this time). This means that Conversion data is not accurate until 30 days after the last date in the date range you are looking at! Here is one of my client’s Conversion data when looking at his account at the start of February:

Here is the same client, looking at the same date range, at the start of March:

You can see that we have gained 47 conversions and shaved 22p off our Cost/Conversion. I would advise that when you are looking at your Cost/Conversion, you need to be looking at a month ago and working on those stats. Obviously use current stats as an indicator – if you are spending £1000 and getting 0 conversions, there is a problem!
For your client’s account, this may not necessarily be a problem – looking at the Search Funnels the majority of people on this example site convert on their first visit:

One thing you should implement is Remarketing. This will allow you to show ads to people that have visited the site, but not purchased, in order to keep your business front of mind. This will help with your overall Cost/Conversion as people will be more likely to purchase from you. You can see that you have achieved 572 conversions from people visiting this site more than once. Hit people with an offer during their consideration period and watch them come back and buy from you. You can then factor in View-Through Conversions; someone seeing your Display ad, typing in the URL manually then purchasing.
In the example above I used Conversion (1-per-click) metrics because the client is particularly interested in first time sales directly from Adwords. However, for the majority of your clients you should be looking at Conversion (many-per-click) metrics. Conversions (many-per-click) count a conversion every time a conversion is made within 30 days following a click, and this gives us a better idea of the actual value of the business that Adwords brings in. Looking at the same client as above, here are the 1-per-click metrics versus many-per-click metrics:

The real benefits of the Adwords account are hidden when you only take a look at 1-per-click metrics; educate your client!
You also want to consider Assist Clicks and Impressions. When you see a Conversion being attributed to a Keyword, you’re not seeing the whole picture. These metrics show how keywords have been part of the purchasing process, but were not the keyword that finally led to a conversion. If these keywords were not present in the account, you may have lost conversions! Here is an example:

The two keywords highlighted in red did not convert – however, they were part of 4 other conversions! This is something you have to be careful with when looking at pausing non-converting keywords. My advice to you would be to look at the last 6 months’ worth of data (make sure your last date is at least 30 days ago) and highlight any keywords that have been active for the whole time, and that have not had any Conversions or any Assist Conversions. You can then quite confidently delete these from the account.
Next, highlight any Adgroups that are above your target CPA. You now need to investigate why the CPA is so high, so run a Search Term Report for the Keywords and find out what searches are actually triggering your keywords. Add in converting terms to bid on them and add any irrelevant/costly terms as negative keywords. Also take a look at the advert that is being triggered – is it accurate? Does it land on the right page?
Finally, manage the client’s expectations. Although the client wants a certain CPA, this is not achievable overnight, and is a long-term goal. You should just be looking to bring that CPA down little by little. If you try to facilitate a large improvement in one go, you will probably just end up frustrating your client and causing them to lose conversions!
Written by Chris Davenport-Smith, one of our PPC gurus.

0 comments on Help – My CPA Is Too High!

Leave a Reply

Your email address will not be published. Required fields are marked *

Call back form