Why did the CPA skyrocket? 10 checkpoints to help improve advertising effectiveness

The reason why CPA rises is thought to be a decrease in CVR or an increase in CPC , but the increase in CPA can be suppressed by taking appropriate measures.

Therefore, in this article, we will introduce 10 checkpoints that show why CPA is soaring , how to reduce CPA , and how to improve advertising effectiveness.

If you are an ad operation manager who is considering improving CPA, which has skyrocketed in listing ads , please refer to it.

Table of contents

  1. Why is the CPA of advertising soaring?
  2. How to reduce the CPA of ads
  3. 10 checkpoints that show how to improve advertising effectiveness including CPA
  4. Visualize advertising effectiveness and improve CPA

 

10 checkpoints that can be judged even if you have no experience in advertising management

Has ad performance hit a plateau? ? We will introduce 10 checkpoints that can be judged even if you have zero experience in advertising management.

Why is the CPA of advertising soaring?

The formula for calculating CPA (Cost Per Acquisition ) is as follows:

In addition, ①Cost ( advertising cost) and ②CV (number of conversions) are calculated using the following formula.

As you can see above, ①Cost and ②CV are both calculated by multiplying the number of clicks. In other words, CPA can be rephrased as follows:


How to calculate CPA_border.png

From this, it is thought that CPA rises when the denominator CVR decreases and when the numerator CPC increases . Now let’s take a closer look at each factor.

Lower CVR

The main factors that reduce CVR are:

  • Declining demand for the company’s products due to seasonal fluctuations, price fluctuations, competitive campaigns , etc.
  • Inflows from keywords with low relevance increase due to mistakes in targeting
  • Users are leaving due to problems with the site structure or content

External factors should also be considered when evaluating ads from CVR .

Increase in CPC

The main factors that increase CPC are:

  • Ads are posted with keywords that are easy for competitors to enter
  • Ads are slow to appear due to low ad rank
  • Ad fraud ( ad fraud, ad fraud) damage

Even if the CPC itself is low, the CPA may skyrocket due to the number of clicks increasing more than expected .

How to reduce the CPA of ads

There are two ways to reduce the CPA of advertising : “Increase CVR ” or “Lower CPC”.

increase CVR

There are three main ways to increase CVR .

● Revise targeting

Make sure your ads are reaching the intended target .

If your ad reaches an unexpected target , there is a high possibility that it will not lead to results. In that case, reset the persona , draw a clearer image of the user, and start by understanding the behavioral characteristics of the assumed target.

This allows you to efficiently review your targeting.

● Review ad creatives, LPs, and entry forms

Check ad creatives ( ad text and banners ), LP, number of users who transitioned to the entry form , exit rate of first view , stay time, and understand where visitors are leaving .

When the visitor does not act in line with the purpose, make a hypothesis and redesign the lead to CV .

● Review appeals

Review your ad copy and CTA claims. Advertisements incorporate killer messages and create convincing sentences .

A CTA emphasizes a specific benefit , such as “buy a great value set” . It is also necessary to take measures such as devising color schemes and designs and increasing the number of installation locations .

Lower your CPC

There are two main ways to lower your CPC.

● Review quality score

By reviewing the quality score , there are more cases where you can bid cheaper than the market . A quality score of “8 to 10” is recommended for proper nouns such as company names and product names , and “7 or higher” for other words.

However, Quality Score is a diagnostic number that identifies ads that need improvement . Please use it only as information for diagnosing low quality advertisements .

As a specific measure to improve Quality Score , it is effective to increase the relevance of ads for keywords and improve LP.

● Revise targeting

Too narrow targeting can increase competition and increase CPC. Therefore, expanding the range of targeting appropriately is one way to lower the CPC.

However, you need to find the right balance, as unnecessarily spread out will result in more irrelevant clicks. It’s important to regularly evaluate your targeting effectiveness to find the best coverage.

10 checkpoints that can be judged even if you have no experience in advertising management

Has ad performance hit a plateau? ? We will introduce 10 checkpoints that can be judged even if you have zero experience in advertising management.

10 checkpoints that show how to improve advertising effectiveness including CPA

From here, we will introduce 10 checkpoints based on Google Ads that show how to improve advertising effectiveness, including CPA.

1. Extremely low optimization score

Check the optimization score from the Google Ads dashboard > “Improvements”.

The optimization score ranges from 0% to 100%, with 80% or higher being desirable . Anything less than this means there is still room for improvement action.

[Hint for solution]

Since the list of optimization proposals is displayed in order from the ones with the highest improvement effect, it is better to implement them in order from the top . However, there is no problem in leaving unimplemented measures that deviate from the independently set KPIs .

2. The number of campaigns and ad groups is large for each type of product

Check if the ad group is appropriate for your product/service from the Google Ads management screen > ” Campaigns ” > ” Ad Groups”.

If campaigns and groups are too fragmented, it will be difficult for machine learning to progress , resulting in an account structure that is difficult to improve .

[Hint for solution]

The point is not to divide the account structure finely, but to summarize it for each theme . However, if the appeal is different even for the same product, it is better to divide the ad group so that the ad sentences that match the needs can be issued. Note that strict budget control can only be done on a campaign- by-campaign basis.

3. Ad creatives are duplicated in multiple campaigns/ad groups

 

Sort by Google Ads Dashboard > Ads & Assets > Ads to check for duplicates of the same ad creative.

As with the above, duplication makes it difficult for machine learning to progress, which can lead to inefficient advertising operations.

[Hint for solution]

By combining duplicate campaigns and ad groups, it is possible to create a data base with a large volume , which facilitates the progress of machine learning.

4. The same keyword exists multiple times in the campaign/ad group

Go to Google Ads management screen > “Keywords” > “Search keywords” or “Search terms” and check if there are any duplicates of the same keywords or search terms.

If the same keyword exists, there is a possibility that the CPC will soar unnecessarily .

[Hint for solution]

When duplicate keywords are found, machine learning proceeds smoothly by keeping the keyword with the highest number of CVs and stopping the other.

5. Your target keyword is excluded

Check if the target keyword is excluded from the Google Ads management screen > “Keywords” > “Negative Keywords”.

Ads may not be displayed if the target keyword is registered as a negative keyword .

[Hint for solution]

There may be some reasons for excluding target keywords, such as soaring CPA or not competing with other campaigns for keywords. When canceling the exclusion, check the background before operating .

6. Impression share loss due to budget

From the Google Ads management screen > ” Campaigns ” > “Display items” > “Change display items”, expand the competitive index to display “Various impression shares “.

Impression share refers to the ratio of the number of times an ad was actually displayed or not displayed out of the total number of ad display opportunities . It helps you determine if your ad can reach more people if you increase your bid or budget .

[Hint for solution]

Impression share loss due to budget is common when advertising on keywords with high competition and high bids . By weakening the bid ( lowering the CPC or target CPA ), losses can be avoided, and a lower CPA can be expected for the same budget.

7. High impression share

Impression share may be low at the campaign level but high at the keyword level .

It can be said that the higher the impression share , the lower the opportunity loss, but if it is 80% or more , there is a high possibility that the advertisement is hitting users with low ROI .

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