How to tell If Your Target CPA Is On Track?

"Happiness is not something ready-made. It comes from your own actions." - Dalai Lama

Understanding The complicated metric of Target CPA vs. Actual CPA.

Running a small business is tough. Juggling everything from product development to customer service can feel overwhelming. And then there’s Google Ads. With its endless metrics and complex terminology, it can easily become a black hole of time and money.

One of the most confusing aspects of Google Ads is the Target CPA. What does it even mean? And is it actually doing what you think it’s doing? Let’s break it down.

What is Target CPA?

Target CPA (Cost Per Acquisition) is a bidding strategy where you tell Google your ideal cost for each conversion. It’s like setting a price ceiling for your customers.

What is Actual CPA?

This is the real cost you’re paying for each conversion. It’s the bottom line, the cold hard cash you're spending to get a customer.

Are they on track?

So, how do you know if your Target CPA is working? There’s no magic formula, but here are some things to look out for:

• Check your conversion volume: If you don't have enough conversions, your CPA can fluctuate wildly.

• Look at the bigger picture: Don't just focus on one day or week. Look at your performance over a month or more. I usually take a few looks at different windows. a look at 30 days, then 60 days and 90 windows to give me enough data to decided whether we need to adjust our Target CPA up or down.

• Compare and contrast: Calculate the difference between your target and actual CPA. A big gap means something needs to change.

• Consider conversion quality: Not all conversions are created equal. A high-value customer might justify a higher CPA.

  

What to do if they're not on track

If your actual CPA is higher than your target, don't panic. There are things you can do:

• Lower your expectations: Sometimes, your target CPA might be too aggressive.

• Improve your ads: Make them more relevant and compelling.

• Optimize your landing page: Make it easier for people to convert.

• Refine your keywords: Ensure they match what people are searching for.

Remember, Google Ads is a learning process. What works today might not work tomorrow. Keep an eye on your metrics, make adjustments as needed, and don’t be afraid to experiment.

Do you have any questions about your Target CPA or Google Ads in general? Let me know by scheduling a free 15 minute Call.