Today’s topic is this one in the text: we’re going to talk about what CPA is in Google Ads, something that is actually quite simple and that we’ll resolve in the first 5 minutes of conversation.

But after that, I would like to invite you to understand CPA in a different way, analyzing how it behaves in a scenario outside of Google Ads, where it even has another name: CAC, Customer Acquisition Cost.

Today’s conversation is long and full of twists and turns! Are you ready to get started?

What is CPA in Google Ads?

CPA is a campaign objective in Google Ads where you determine not the value of each click, but the expected value per conversion on your ad. 

Here’s how it works: You set a goal in Google Ads and set an expected CPA to achieve that goal.

Let’s assume that the Netherlands Phone Numbers objective is to sell a product online, using the SaaS model.

With this determination, and the determination of the desired CPA, you are communicating to Google that you intend to pay the amount X for each conversion of this objective.

And at the same time, it communicates to Google that if the conversion doesn’t have much chance of happening, it’s better not to even enter that auction and save the budget for another SERP, another search.

This all works with Google Ads AI, which is pretty advanced. If it thinks your target CPA is too low for a specific auction, it won’t show your ad at all.

This is a great working model, since you only pay if conversions happen. But at the same time, it is a much more expensive model, by far the most expensive on Google Ads.

In some cases, the value of these Google Ads CPA campaigns can be up to half of the sale. 

This is a very specific type  of ad and it is usually run by very experienced professionals in Paid Media.

It’s that simple. To understand  it better, we need to talk about its opposite, the CPC:

What is the difference between CPC and CPA? 

CPC is another type of advertising, usually much cheaper. Its full name is Cost Per Click.

In Google Ads, when you India Phone Number List  search for keywords, you will notice that each one has a value.

This amount is your CPC: every time your ad receives a click on the SERP where it is displayed, you pay the keyword amount. 

It doesn’t matter whether the person reached the conversion goal or not. In fact, you don’t even determine this goal — it’s already defined, it’s the click.

This is the main difference between CPC and CPA. In CPA, you set the conversion goal and only pay if it is met.

And precisely because of that, you will pay more.

 

What is CAC and what is its relationship with CPA?

CAC, or Customer Acquisition Cost, is one of the most important metrics in digital marketing.

This is because it is the type of metric that does not work alone: ​​it is an indicator of both the success of your marketing and the health of your business.

And it also works outside of the digital marketing realm. All marketing efforts have a direct influence on CAC, even those you do offline. 

And CAC has a direct influence on your profit at the end of the month.

The issue is that many people don’t see this influence, not because of the metric, but because they don’t measure it.

CAC, regardless of your market and the strategies you put into practice, needs to be measured constantly, action by action and on a macro level as well.

There is a very obvious relationship between CPA and CAC, and a very glaring difference as well.

CPA is usually understood as a type of Google advertising. If you use this acronym anywhere else, it will be understood this way.

But at the same time, it indicates the same thing as CAC: the cost per acquisition.