PPC Performance Indicators: Cost Per Conversion

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In simplest terms, cost per conversion measures the average amount you are spending for traffic to get a single conversion. This is also referred to as cost per acquisition (CPA). It tells you at a glance whether your campaigns are profitable or not.

CPA = Total cost / total number of conversions

CPA lets you know how much of the traffic you are getting is giving you business, in terms of currency. Of course, you won’t be able to measure your CPA unless you already have at least one conversion.

Cost Per Conversion


How To Lower Your Cost Per Conversion

In pay per click marketing, the goal is to get the lowest possible CPA. There are no industry benchmarks for CPAs; it’s totally up to you to determine the ceiling amount that you are comfortable with. Of course, you’d want to get a CPA that is lower than the revenue you get per conversion in order to get a profit. Here are a few tips to reduce your CPA:

1. Reduce your cost per click.

If you’re ignoring your CPC because you want to focus instead on the “bigger things”, then you should know that each overpriced click contributes towards huge advertising costs. By reducing your CPCs, you also reduce your total cost.

Also, lower CPCs means you can get more clicks at the same budget, and possibly increase the chances of getting conversions. Lower costs and more conversions, you do the math.

2. Optimise your landing page.

So you’ve managed to get clicks to your website. But are these visits turning into conversions? If you have a high CPA, then no.

Check your web analytics data. If your landing page has a high bounce rate, it means people are exiting your site without bothering to check out the rest of your website or going forward towards your conversion page. Perhaps something in the landing page turned them off and made them lose interest. Was your offer clear enough? Was the page easy to navigate? Did the page load quickly? Improve your landing page and test it continuously, otherwise you’re just wasting precious traffic.

3. Optimise your conversion funnel.

Getting a user to click your ad means you have him one step further in your conversion funnel. But there are points in a conversion funnel where a potential customer loses interest and abandons it.

If a user gets past your ad but leaves your website without a conversion, then you have to figure out your potential leakages and fix them. Do they get distracted by other links? Remove those. Are they overwhelmed by a twenty-field form? Split those into bite-sized pieces. As always, test to get the best.


Are you spending too much for a conversion? Get your AdWords Health Check from us and we’ll let you know how you can reduce your CPA. Did I mention that it’s FREE? Enquire now!

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