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Two Ways to Decrease Cost Per Acquisition in Google Ads

Cost per acquisition, sometimes referred to as cost per action or simply CPA, is a metric that measures how much a company spends in order to obtain a lead or conversion. In Google Ads, cost per acquisition (CPA), is calculated by dividing the total cost by the number of conversions.

CPA = Total Cost/Conversions

The goal is to keep the CPA as low as possible. At a consistent level of spend, two of the most effective ways to decrease your Google Ads CPA are:


1. Decrease Cost-per-Click (CPC)

One way to decrease cost-per-click (CPC) is by improving the Quality Scores of your keywords. Each keyword in your Google Ads account will have a Quality Score between 1 and 10. These scores are an estimate of the quality of your ads and landing pages triggered by those particular keywords. In general, the higher the Quality Score, the lower the cost-per-click. In fact, for each point a score is above the average Quality Score of 5, the CPA will drop about 16%.

Another way to decrease your account’s CPA is to look for new keywords to use with lower CPCs. By decreasing your account’s average CPC, your website will receive more visitors at the same total cost. More traffic, at the same conversion rate, means a larger number of conversions. Therefore, if you acquire a larger number of conversions at the same total cost, you will decrease you CPA.

For Example:

Let’s say your Google Ads account has a set monthly spend of $5,000.00/month and a 7% conversion rate. The chart on the right shows the average cost-per-click you would receive based on the number of visits and conversions along with the estimated CPAs. Using this chart, we can see that if all other variables remain the same, decreasing your average cost-per-click causes your cost-per-acquisition to decrease as well.

2. Increase Conversion Rates

Another way to decrease your Google Ad account’s CPA is by improving the conversion rates of the landing pages used for you ads. By increasing the number of conversions and keeping the cost the same, you decrease the cost-per-acquisition.

Conversions_orange

For Example:

Let’s say you have a Google Ads account with a set monthly spend of $5,000.00/month and an average cost-per-click of $2.46. Using the chart on the right, you can see the conversion rates you would receive along with the number of conversions and the estimates CPA. If all other variables remain the same, increasing the conversion rate will decrease the cost-per-acquisition.


Client Case Study:

A local university that offers an online early college program for high school students approached us for help with increasing enrollment.

Our initiative with the university was to increase traffic to their Early College landing pages using paid search (PPC), improve their online conversion rate, and increase their Early College programs enrollment over the course of two months.

The Goal:

To drive awareness, generate leads, and gain a better understanding of market response in the defined geographic regions across the country in which they had no prior presence or brand awareness established. With our thorough research, well-thought-out strategy, methodical execution, and nimble response. We were able to meet all of these goals, resulting in an effective campaign delivered on time and on budget.

The Results:

Using Unbounce landing page testing software, we ran multiple conversion rate test and improved the campaigns conversion rate by 70% (7.58% to 10.75%) over the course of the two months.[/vc_column_text][vc_empty_space height=”15px”][vc_column_text]As you can see from the chart at the right, as we increased the campaign’s conversion rate we were able to reduce the CPA by nearly 10% ($46.01 to $41.61). Through our testing with Unbounce and diligent Google Ads account management we were able to achieve a CPA that is lower than the Education industry’s average of $42.13 – according to WordStream.


two people reviewing campaign

Exploring Google Ads Part 2: Display, Shopping, and Video

In our last blog, we explored the basics of Search Listing Ads and when they’re most effective. In addition to search listing ads, there are a number of other advertising options available in Google Ads.


Previous Post: Exploring Google Ads Part 1: Search Listing Ads ➢


Display Ads

Display Ads are one of the most popular forms of PPC advertising options in Google Ads. They appear on the Google Display Network, which is a collection of websites – including specific Google-owned websites like Google Finance, Gmail, Blogger, and YouTube – that show Google ads.

The Google Display Network lets you place ads on news sites, blogs and other niche sites across the internet to reach more potential customers. They are very effective for attracting new customers with eye-catching ads. Great display ad campaigns start with great ads. You can create your own in minutes using the free display ad builder in Google Ads tools.

There is a variety of ad formats and sizes which I’ve detailed below:

  • Text Ads – Similar in appearance to search listing ads, but appear within a website instead of the search engine.
  • Image Ads – Frequently referred to as banner ads; they can be used in a variety of sizes.
  • Rich Media Ads – Ads with animation or other types of motion (.GIFs)
  • Video Ads

There are a variety of targeting options available for display ads that can be used in combinations or separately. The most effective ads and targeting are dependent on the goals of your display ad campaign. Some common targeting tactics include:

  • Contextual targeting – Matches relevant site content
    • Keywords (based on keywords used in a site’s content that is part of the Google display network)
    • Topics
  • Audiences – Reaches specific groups of people
    • Audiences (affinity audiences & in-market audiences)
    • Interest categories
    • Re-marketing
    • Demographics (age, gender, and marital status)
  • Managed placement targeting – Selects specific websites and apps
    • Placements (target and bid on specific websites)

We find that clients are most interested in image re-marketing display advertising. While this may be the most common type of display ad used, they all are viable options. The “best” type and targeting for display advertising is dependent on your messaging and goals.

Shopping Ads

Shopping Ads or PLAs (Product Listing Ads), drive traffic and sales to your website or store by showing online shoppers rich images of and details about your product. They appear in their own box on Google search results above or to the right of organic search results. Google shows the customer a picture of your item, its price, and your store name. Customers who click on the ad are directed to your website.

With Product Listing Ads, you’re charged only if someone clicks on your ad and lands on your website. In other words, you only pay when Google directs a customer to your store. Product Listing Ads are created by submitting product data feed in a Google Merchant Center account. Once the data feed is submitted and approved, the PLA campaign can be managed within your Google Ads account.

Shopping Ads are very effective for companies with e-commerce website who have a large product offering. If you sell under 500 products, you may have trouble getting visibility on Google Shopping. However, if you sell products in categories like automotive supplies, clothing, tools, or furniture and you’re not listing on Google Shopping, you’re likely missing out on significant revenue. Google Shopping Ads dominate for online merchants and tend to generate the most traffic and profit for e-commerce sites.

If you sell products in categories such as automotive supplies, clothing, tools, or furniture and you’re not utilizing Google Shopping ads, you’re likely missing out on significant revenue.

YouTube Advertising

With YouTube ad placements your ads either appear before videos play, beside videos playing, or in search results. The two types of ad placements offered on YouTube are:

  • In-stream – TrueView in-stream ads run on videos on YouTube watch pages or within Google Display Network videos, games, and apps. After five seconds, the viewer has an option to skip the ad.
  • In-display – TrueView in-display video ads appear only on YouTube Watch pages and on the Watch pages of video publishers on the Google Display Network. The appearance of the ad will vary, depending on which ad sizes and ad formats that content publishers support. For example, YouTube is a key content publisher within the network, and these ads will function and appear in the same way across the YouTube site.

[/vc_column_text][vc_column_text]YouTube Ads Formats:

  • Display – Appears to the right of the feature video and above the video suggestions list. For larger players, this ad may appear below the player. (300×250 and 300×60 Desktop Only)
  • Overlay – Semi-transparent overlay ads that appear on the lower 20% portion of your video. 480×70 (Flash) or text (Desktop Only)
  • Skippable Video – Skippable video ads allow viewers to skip ads after 5 seconds, if they choose. Inserted before, during, or after the main video.
  • Non-Skippable Video – Non-skippable video ads must be watched before your video can be viewed. Long non-skippable video ads may be up to 30 seconds long. These ads can appear before, during, or after the main video.

YouTube Ads allow you to get your message in front of individuals searching for, or viewing, specific YouTube videos. They are a good option for most companies because the CPC (cost-per-click) is lower than search and the ads are very effective when used correctly.


Related Post: PPC vs. SEO: Which One Should I Focus On? ➢


At the end of the day, the right targeting, ad formats, and network are dependent on your ad’s messaging and your campaign’s objectives.


–> For instant access to Parqa’s blogs, follow us on Twitter at @ParqaMarketing and on LinkedIn!

man typing in Google on his laptop

Exploring Google AdWords Part 1: Search Listing Ads

Throughout its colorful history, paid advertising has proven to be a legitimate source of lead generation, sales, and revenue for businesses. Now, online paid advertising (more specifically pay-per-click PPC advertising) has demonstrated its utility as an excellent channel of marketing for any company.

So why does PPC advertising often become soiled, solely focused on search marketing advertising, and even more so, on Google Ads search listing ads?

Most often, this happens when businesses start investing in PPC advertising with little or no knowledge of all that Google Ads has to offer. There is a lot more to Google Ads than just your basic search listing ads. So let’s take a look at an overview of the different types of paid advertising that are available through Google Ads.

  • Search Listing Ads (SLAs)These ads appear next to or above relevant search results and allow you to reach customers on all the devices they use to search for information.
  • Dynamic Search Listing Ads (DSLAs)These ads use the content found in your website to target searches, rather than using keywords. They include headlines that are dynamically generated from the both the search and your site’s content. They then lead to a dynamically selected landing page on your site.
  • Remarketing Search Listing Ads (RSLAs)This is a feature that allows you to customize your search ads for people who have already visited your website.

Search Listing Ads

Google Ads’ basic search listing ads are the foundation of many of our online advertising campaigns. Google continues to improve standard  search listing ads and they have evolved over the course of the last few years with ad extensions. I use the ad call extensions, ad sitelinks extensions, and the ad call-out ad extensions the most frequently, but we’ll look at those further another time.

In addition to the basic search listing ads there are two other types of search marketing campaigns that can be created in Google Ads, dynamic search listing ads and re-marketing search listing ads.

Dynamic Search Listing Ads

These ads are extremely useful for companies with websites that have a large number of products or services. Businesses with websites that contain a lot of content or well-structured URLs will typically see the best results with dynamic search listing ads.

With these ads, Google writes your ad headline and sets the destination URL based on your website’s content. This sometimes limits how specific the description lines in the ad copy can be.

Also, negative keywords and exclusions are important in narrowing the targeting of your dynamic search campaigns. Left unmonitored and unfiltered (or incorrectly configured) dynamic search listing ad campaigns can run wild and be expensive. However, they are extremely successful when they are correctly configured, managed, and optimized.

Re-marketing Search Listing Ads

These provide companies with a method of targeting previous visitors to their websites with tailored search listing ads. We find RSLA campaigns are most effective when used to target past buyers as they search for other products you sell on Google. They are also helpful in targeting people when they leave your site without buying anything and continue looking for what they need on Google’s search engine. Both the methods above are very effective for large e-commerce websites.

There are many other forms of advertising available in Google Ads. In our next blog, we’ll discuss Display, Shopping Campaigns (Product Listing Ads), and YouTube.


Next Post: Exploring Google Ads Part 2: Display, Shopping, and Video ➢


–> For instant access to Parqa’s blogs, follow us on Twitter at @ParqaMarketing and on LinkedIn!

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