April 14, 2020

#FreeAdvice: How to Lower Your CPA

There are three ways to make a major impact on your CPA for the better that are entirely within your control.
Posted in: #FreeAdvice, PPC
President & Lemonhead Evangelist

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Q: Got any tips on lowering my cost/lead (CPA) in Google Ads?

A: You bet! This is going to be more of an entry-level answer since getting really in depth will be very account-specific. But there are three ways to make a major impact on your CPA for the better that are entirely within your control. Sure, a better landing page experience can help conversion rate, but we don’t always have total control over that piece of the puzzle, so let’s focus on what you can do in Google Ads.

1. Review and improve your quality scores

Got keywords with a quality score of 4 or worse? Bringing them up to an 7 or better can cut your cost/click in half – or more! If all other things remained constant, that would cut your CPA in half. And you’d be able to get more traffic for the same budget.

An easy way to identify problems is to look at all keywords in your account, add columns for Quality Score, Ad Relevance, Landing Page Experience and Expected CTR. Filter for keywords with a Quality Score less than 5. From there, sort by impressions (descending).

These are the keywords really hurting your performance. There are a few steps to take to improve (this could be an entire series of articles, but we’ll cover the basics):

  1. Move poor Quality Score keywords to a new ad group.Let’s say you have an ad group with one or two of these problem keywords and the rest are fine or even good. You don’t want to change your ads and have it potentially hurt the good keywords, so just move the bad ones elsewhere. This allows you to work on those keywords in isolation.
  2. Re-Write Ads Where NecessaryPoor ad relevance? Chances are you’re not using the keyword in your ad copy. I’d suggest using the keyword in one of the headlines as well as one or both description lines. And try to use the exact keyword text. If you can’t, you probably need to split your keywords into additional ad groups to make this work.
  3. Find New Landing PagesOr improve existing ones. Poor landing page experience is so often because people just send all traffic to the home page. But even if you’re not doing that, something about the landing page needs improvement. Sometimes it’s even a matter of wording. Your landing page might say “athletic shoes” and your keyword is “running shoes.” So you need to either find a more specific page or edit the copy to reflect what’s in your keywords and ads.
  4. Live with it or Pause

Got keywords with bad quality scores and nothing you do can help it? If the keyword is driving leads at a cost you’re okay with, you can live with it. If it’s not, it might be best to just pause the keyword.

2. Separate Your Best Performing Terms

Run a search term report for a long time-frame. Look at keywords and search terms that have driven a large number of leads (relative to your account as a whole) and have a CPA you’re happy with. You want to make sure of two things.

  1. That these are all keywords you’re bidding on with exact match (if not, add them)
  2. That these keywords have their own budget that isn’t impacted by the poorer performing terms.

It might be tempting to move these keywords into their own “Top Performer” campaign. That’s the easy route, but a poor choice. You’re losing all the history attached to these keywords by moving them – both in terms of data and quality score.

Instead, leave them where they are and take all the other keywords and move them to an “Opportunity” campaign. This way you can let your best terms continue to drive leads while you have the poorer performers elsewhere with a more limited budget and in their own campaign(s) where it’s easier to focus on improvement.

  1. Use Automated Bidding

If you’ve tackled the first two steps, you should be left with a campaign (or several) that have performed well for a while now. This should make these campaigns great candidates for automated bidding. Specifically the Target CPA option.

My suggestion is always to start with a CPA target that is in line with your historical average. Usually Google will recommend this number to you. Also make sure any campaigns where you use this aren’t limited by budget.

But since you have done a good job optimizing these campaigns, it should be really easy for Google to hit your target. That means once the learning process is complete, you should be able to set a lower target. From there you can use Google’s estimates to find the balance of an ideal CPA vs lead volume. But a well-optimized campaign with a good history should consistently do very well with bid automation.

How Did it Work?

Did this help? Give us a comment and let us know. If you’re still struggling and want to talk specifics, we’re happy to try and help!

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