Every day we see marketers getting excited about CPA, Cost Per Action, marketing. They compare CPA to PPC, and they see much higher payouts, with a great return on investment from fewer click-through actions. That’s great, but it’s far more involved than just a great payout for a click. You see, there’s a whole front-end lead-in process to get that click, and it frequently involves paying for clicks with Google Adwords to get the searcher to the landing and offer page.
It’s really exciting to know that every click on an insurance ad is going to get you a $20 payout … that is until you find that you’re spending $22 to get enough people to the site to get that click. So, one thing you must get a handle on before you blow a lot of money is the approximate conversion rate of your ad/landing page. If you can safely plan on converting one-in-ten who click through from an AdWords ad into a CPA click, then you know that you can’t afford to spend $2 each, as that just breaks you even.
So, you know that you need to get ten people to the ad/page to get a $20 payout, then you go out and do your Google AdWords research on the keywords and phrases that will perform for you. You find a few good ones, but they seem to all cost between $1.00 and $2.00 per click. Let’s split the difference for a look. At $1.50/click, it will cost you $15 to get 10 people to your ad and to get that $20 payout. That’s a 33% return on your investment, so not too bad as long as you hold that one-in-ten conversion or better.
However, what if we told you that you could be getting positioning in the top three or four spots in the paid ads consistently cheaper than that $1.50? And, what if we told you that you could get higher positioning than your competition who are still paying between $1.50 and $2.00 per click? These are both true statements if you understand your Google AdWords Ad Quality Score. You see, Google wants to move ads toward the top of the paid results if the ads consistently get more clicks, a higher CTR, Click-Through Ratio.
And, Google wants to send people from that ad to a landing page and site where they find what they wanted to find, and hopefully they take some action and/or stay on the site a while and look around, viewing multiple pages. This makes the searcher happy, and they continue to be loyal to Google Search. Google scores ads based on a secret and complex algorithm, but it definitely relies heavily on the CTR of ads and the actions taken by the searcher on the site where the ad takes them. So, you need to split test different ads with different headlines and wording, as well as changes to wording, images and the call to action on your landing page.
Just doing these two things can move you up several positions in the paid search results while lowering your cost per click at the same time. The advertiser whose account has the Quality Score shown for their main key phrase has proven multiple times that once Google gets some results for your ads and determines a good ad score, you save a ton of money. This advertiser usually moves from somewhere near $2.00 per click for a new campaign to around $0.70/click once the ads and landing pages bring about a great ad score. Note that this is the case because of that perfect 10 out of 10 score.