By cchi@hubspot.com (Clifford Chi)

In the paid acquisition world, clicks on your ads can seem like the holy grail. But to accurately measure my content’s converting capabilities, I’ve found cost per acquisition (or CPA) to be a much more valuable metric.

If you really think about it, clicks only tell you if people arrive at your content — not if they stay and, better yet, buy into your product or service. Monitoring cost per acquisition, on the other hand, has helped me determine whether my content is engaging enough to convert.

Here’s what I’ve learned about what exactly CPA is, how to calculate cost per acquisition, how the bidding process works, and some key principles for crafting creative and convincing ad copy.

Table of Contents

• What is cost per acquisition (CPA)?
• Why is cost per acquisition important?
• How to Calculate Cost Per Acquisition
• What is a good cost per acquisition?
• How Cost Per Acquisition Bidding Impacts Ad Rank
• How to Lower Cost Per Acquisition (CPA) Costs

Many marketers prefer the cost-per-acquisition pricing model because they can define an acquisition before they start advertising and only pay when their desired acquisition or action occurs.

For example, if you define acquisition as submitting one specific form, you’ll pay each time that form is submitted — but not when visitors click on your ad and simply view the form.

I like this model because it allows you to stretch your advertising budget just a bit farther. (Check out these free templates to help you manage your budget!)

This pricing model is used in a handful of paid marketing mediums, including:

• Pay-per-click (PPC)
• Display
• Social media
• Affiliate
• Email marketing
• Content marketing

Why is cost per acquisition important?

If you’re considering pay-per-click advertising, you need to understand CPA. It’s an important metric to help you plan your advertising strategy.

To help you better understand why, I thought it would be useful to share insights from marketing and advertising specialists.

Here’s what they said when I asked, “Why is cost per acquisition important?”

1. Plan your marketing budget.

Ross Kernez, founder of SEO Meetup and CEO of Stealth, told me that your CPA can help you better plan your multi-channel marketing strategy, including PPC, social media, and content marketing.

Kernez said, “Knowing your CPA enables better allocation of marketing budgets. It helps marketers identify which channels are more cost-effective in delivering results, allowing them to focus resources on high-performing campaigns while cutting back on underperforming ones.”

2. Improve your conversion rate.

Calculating your cost per acquisition can also help you identify strengths and weaknesses in your marketing strategies. Then, you can trim away efforts that aren’t pulling their weight and focus more of your time and resources on campaigns that bring the most conversions.

Cristina Muchi, founder and CEO of Upway Marketing, put it this …read more

Source:: HubSpot Blog

Author: Aaron