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5 Questions to Ask Yourself before Launching a Cost-Per-Action Advertising Campaign

Online advertising is about as broad a topic as the Internet itself. Even with a sea of display and payment choices, CPA (cost-per-action) advertising remains a top choice for digital marketers. With this type of campaign model, advertisers only pay when a click leads to an action that, depending on the business’s marketing goal, can be anything from a captured email address to a product sale.

Before you dive into the world of CPA advertising, here are five questions to ask (and answer!):

  1. What are you trying to achieve? The goals that can be accomplished with CPA advertising vary widely across industries, so start your campaign with a list of objectives. Examples include:
    • I want to increase traffic to my site
    • I want to grow brand awareness
    • I want to drive leads and conversions
    • I want consumers to sign up for my email list
    • I want consumers to download a coupon or request a free sample
    • I want consumers to purchase my product
  2. Who are you trying to reach? CPA ads are affected by the demographic characteristics of your audience – even those you haven’t identified yet. Consider what time of day you want people to engage with your campaigns or whether they should access them from their desktops, tablets, or mobile phones. The more granularly you outline your ideal customers, the easier it will be to acquire them. Ask yourself:
    • Are they men or women?
    • How old are they?
    • What’s their income level?
    • Do they own a car?
    • Do they have children?
    • Do I want to target certain devices?
  3. How are you going to track performance? Over time, you’ll need to evaluate your campaign performance, making sure the amount you’re earning is greater than the amount you’re spending. Calculate your Return on Ad Spend (ROAS), a metric that represents the dollars earned vs. the dollars spent in your CPA campaign. Ask yourself:
    • What can I afford to pay to acquire a new customer?
    • Am I only looking for customer engagement?
    • Am I looking at how many people sign up, then actually convert?
    • Am I looking at average order values?
    • How quickly am I looking to make a profit?
  4. How good are you at nurturing leads? Answering this highly influences question #3. If you’ve already adopted sophisticated marketing tactics, with well thought out email, social, and mobile marketing (and don’t forget loyalty programs!) then you’ll be able to target a larger audience with your CPA campaigns. If your lifecycle marketing isn’t as established yet, you should first focus on building this out before launching a CPA campaign.
  5. How much are you willing to pay? Remember, the higher up the funnel an action takes place, the less it will cost. Keep high volume actions, like opting consumers in to your email list, at this stage in the funnel. However, more precise objectives, such as getting digital buyers to sign up for a loan, come at a greater financial investment. Both tactics propel you toward your overarching campaign goals and it all needs to back into an effective cost per new customer goal.
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