CPA stands for cost per action or cost per acquisition, which is the average amount of money you spend to get one conversion from your ads. A conversion can be any action that you want your audience to take, such as making a purchase or filling out a form to become a lead. The average CPA is calculated by dividing the total cost of conversions by the total number of conversions.
Google Ads offers a bidding strategy called Target CPA, which is an automated bid strategy that sets bids for you to get as many conversions or customer actions as possible. When you select the Target CPA bid strategy, you set your desired average cost per conversion, and Google Ads uses your Target CPA to set a bid based on the likelihood of the ad to convert. This strategy adjusts bids using real-time signals like device, browser, location, time of day, remarketing list, and more to improve your performance in every ad auction.
To calculate and benchmark your CPA in Google Ads, you can use the formula: Average CPA = Ad spend / number of conversions. You can also use CPA advertising to help you avoid spending money on search terms that may not be directly driving business. To reduce your CPA, you can improve your conversion rate, use negative keywords, optimize your landing pages, and adjust your bids.
