How to maintain effective marketing while CPA is still growing

What is CPA

CPA (Cost Per Action or Cost Per Acquisition) is one of the online advertising billing models in which advertisers pay publishers for a specific action that the user will perform (classic CPA) or, by narrowing down the definition, for acquiring a new customer or user (Cost Per Acquisition).

If the advertiser pays a small fee for each click on the ad, it may happen that the publisher generates traffic of very low value.

Therefore, advertising in the CPA model should always be carefully analyzed and its costs controlled.

CPA cost control methods

Inbound marketing

Inbound marketing is a term that describes all activities aimed at passively attracting customers instead of actively looking for them. This category includes activities such as blogging, SEO or building brand awareness through social media.

Thanks to appropriate SEO activities, the company has a chance to be high in organic search results for attractive keywords. Thus, it is possible to redirect customers from paid channels (e.g. AdWords) to more cost-optimized channels, such as email marketing or retargeting.

At the same time, it is worth remembering that a good SEO result has a positive effect on various parameters according to which marketing budgets are divided automatically by algorithms that divide them between different publishers.

Inbound marketing and product feed

Inbound marketing also covers all activities carried out in price comparison websites and marketplaces. Thanks to the use of the product feed, the store has the opportunity to advertise in many such channels at the same time without excessive effort.

Optimizing the product feed allows you to maximize the conversion rate on portals such as price comparison websites or marketplaces. The product feed allows you to test the most effective combinations of descriptions, titles and photos and choose the ones that provide the best conversion rate. Tools such as Feedink allow for centralized and automated management of product feeds, thanks to which the scale of possible activity is significantly increased - instead of manual changes for each portal and product, it is possible to modify one file. On our blog you can read more about product feed optimization.

Landing page optimization

Wordstream data shows that the average landing page conversion rate is 9.4%, with rates varying from 3% to 11.45% depending on the degree of optimization. This means that the best optimized landing page gets up to four times more clicks than the least polished one.

In most cases, CPA advertising redirects the user to the landing page. The company has already paid for obtaining a given click, and only the preparation of the landing page depends on further effectiveness, and thus the cost of the advertisement.

Continuous testing and improving the ratios of individual landing pages will reduce the cost of CPA advertising thanks to more effective persuasion of customers to perform a specific activity.

Another form of optimization is to offer the customer an alternative - if he is not ready to buy yet, leave his contact details. In this way, it is possible to reach it through another channel (for example via email) without paying for it again.

Narrowly targeted campaigns

Modern marketing automation tools allow for very precise segmentation of users. The Wall Street Journal describes the case of TGI Fridays, which is able to target a single customer as part of a campaign, depending on predefined parameters.

It was crucial for the TGI Fridays restaurant chain to send push notifications depending on the daily habits and routine of a particular user. Thus, the notification is sent, for example, when the user returns home and wonders what to eat for dinner. Thanks to the use of artificial intelligence on the collected database of cl

of clients, it is possible to individually hit each client with a message.

In the case of TGI Fridays, this approach resulted in a doubling of the scale of operation in 12 months. The effects are spectacular, but this is an example of extremely narrow targeting and a possibly low starting point. Impressive effects can also be achieved by less precise segmentation of the user list.

Data collected by HubSpot shows that, on average, communication in a company is divided into three segments, and those who decide to segment their mailing list see revenue increases of up to 760 percent.

Conversions, not clicks

Another element of CPA rate control is smarter management of shares for which the company pays. One of the most popular billing models is fee-per-click, which allows you to get high traffic quickly. However, with a low conversion rate at the landing page level, this results in a low ROI - the company buys empty traffic that flows through the page without converting to sales.

In this case, the marketing department should consider and test various billing models that will allow you to check the translation into sales.

An example would be the transition from cost per click (CPC) to cost per lead (contact details) or sales commission. Although in general, the closer the customer is to the end of the purchasing process, the higher the commission of the publisher or website on which he was obtained.

Research and description of sales processes

In the case of advertising in the CPA model, it is difficult to identify the "best" or "cheapest" form of billing without embedding it in a specific customer acquisition model. Without explored purchasing paths, the company can only research partial data, without a picture of the whole.

Advertising in the CPA model can support customer acquisition at every stage of the sales funnel, from building awareness to the purchase itself.

Describing the user's full shopping journey also allows you to design all supporting activities, such as encouraging them to leave opinions on social media or discounts for subscribing to the newsletter.

Summary

Advertising in the CPA model is one of the most transparent and flexible tools for digital promotion. Its growing costs are also an incentive to better plan your activities and reach the client more effectively within the planned advertising budget.

If you want to find out how to conduct activities in the CPA model more effectively, please contact us!