Cost Per Action (CPA): How to Lower Your CPA in AdWords

Cost per action, or CPA – sometimes referred to as cost per acquisition – is a metric that measures how much your business pays in order to attain a conversion. Generally, your CPA will be higher than your cost per click, or CPC, because not everyone who clicks your ad will go on to complete your desired action, whether it’s making a purchase or filling out a form to become a lead. Cost per action takes into account the number of ad clicks you need before someone converts – in order words, improving your conversion rate will lower your CPA. Along with CPC, your CPA will contribute to your overall AdWords costs.

So, what determines your CPA? Like most things PPC, your CPA is directly affected by your Quality Score, Google’s all-important metric based on the quality of your keywords, ads, and landing pages.  In general, the higher your Quality Score, the lower your costs – in fact, for each point your score is above the average Quality Score of 5, your CPA will drop about 16%.

Keeping your Quality Score high and your CPA low can be a huge benefit to your PPC budget over time, giving you the opportunity to buy more exposure in the online advertising space and optimize the number of conversions that come from your ad spend.

How Quality Score Affects Cost Per Action

It’s well known that AdWords Quality Score affects your cost per click, but not everyone realizes that Quality Score is every bit as important in determining your cost per conversion

When you plot average CPA against impression-weighted Quality Score, you see a strong correlation: The higher the Quality Score, the lower the cost per action.