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Cost Per Action (CPA), also sometimes referred to as Pay Per Action (PPA), is a way to advertise that allows you to only pay for each conversion instead of paying each time someone clicks on your ad with Pay Per Click (PPC).  An action is determined by the advertiser and is whatever the desired outcome is, for example, it might be making a purchase, filling out a form, taking a survey etc.

CPA allows you to have a little more control of your advertising budget allowing you to only spend money on terms that are driving lucrative traffic to your site.  Since you only pay when certain actions are performed CPA is a low-risk advertising investment.  This allows you to have more control of you ROI (Return On Investment).

To meet your ROI objectives you need to have successful CPA bidding.  There are three ways to do this:

By Hand – Determine your CPA goal and raise and lower your bids in order to reach that goal.

Paid Tools & Service – There is an array of bid management services and tools that will help you meet your ROI goals by automating the bidding service and managing your bids.  This can save you time as well as help you to minimize conversion costs.

Google’s Free Tool – If your account qualifies Google has a free conversion optimization service that you can take advantage of.

Here are a few pros and cons associated with CPA (Cost Per Action) that should be considered before buying into a new advertising plan.

Pros:

-    As an advertiser you can be sure about your investment and ROI.  It is easy to see how effective the CPA is based on the money you are spending versus the money you are making.
-    Can avoid click fraud sometimes found in Pay Per Click advertising.

Cons:
-    You have to have an impressive website and site history in order to be eligible for CPA network membership.
-    You have to get traffic to the CPA offers.
-    It can be difficult to manage and requires good tracking technology.

If you are considering a change in your advertising campaign look at your goals and then consider giving CPA a try.

The last post covered the awareness and interest stages of the consumer buying cycle. Once the client has moved through these stages, they move into the consideration and purchase stages discussed below. 

 Consideration/Purchase

The consideration stage occurs when the consumer is considering the purchase of a product or service. Consumers at this stage have done their research and are ready to determine if the purchase is worth it. It is at this time, that your ads should reflect valuable features and advantages that your product offers, using keywords such as “high quality dog collars.”

When consumers are in the purchase stage of the buying cycle, they know the exact product that they are looking for at that time. It is at this stage that keywords should be targeted directly to a specific product or action the consumer is going to take. For example, if a top seller is your 100% cotton dog collar; your keywords would reflect that search. Action keywords can be good performers as well. For instance, a keyword such as “buy cotton dog collars” can help to speed up the conversion process, appealing to those customers ready to buy. The landing page for this ad would take the consumer directly to the product page to make purchasing easy. Including the price in the text ad can be helpful as well, helping to weed out unqualified clicks from those unwilling to pay that price.

Online advertising is seeing new methods for placing ads within the content of other sites. No I am not talking about Google’s AdSense program, which displays an advertiser’s ad on other sites within Google’s Content Network. I am referring to the in-text form of advertising that allows advertisers to bid on in-text links on other websites. We have all seen the links within blog articles that show a pop up window when they are scrolled over. The in-text form of advertising allows advertisers to bid on keywords that appear on other websites. The difference between this program and the content ads seen on AdSense, is the ads are shown when a visitor scrolls over an in-text ad link, rather than having the ad appear automatically on the page.

One program that offers this type of advertising is Kontera. The company offers in-text advertising for advertisers, through a bidding platform similar to other pay per click advertising programs. The platform gives advertisers control over their keywords, bidding, and ad creative. In text ads are a great way to get your message and products out infront of potential customers at the exact time they are looking for information.

We will be testing out this new form of advertising on one of our sites. Over the next couple of months I will reveal more about our findings.

Advertising on Google AdWords’ Content Network has created mixed emotions among pay per click advertisers. Many have seen their ads receive thousands of impressions, but few clicks. Others have seen hundreds of clicks, but few conversions. With mixed results on the success of content network ads, some advertisers have turned away from advertising on this network. Up until a few months ago, I had similar feelings. With increased concentration on conversion tracking, content network ads offered no real security for overall ad performance. Recently, however, I have seen the possibility of utilizing content network ads as a branding effort that could generate an increase in direct traffic. Below is a discussion of some of the results I have come across.

Looking at Impressions as a Measure of Success

Today’s advertisers place a great deal of importance on leads and click-though-rates to measure the success of their advertising, however, impressions can indicate success as well, and at a lower cost. After recent changes to an internal pay per click campaign, it has become apparent that branded content network ads can assist in generating traffic to a website, without necessarily causing you to pay for clicks.

Method

The goal our campaign was to see if we could increase site traffic to the site at a low cost through branding efforts only (without offers or competitive advantages). We created a content network campaign with a relatively low content network bid of $0.25 per click. The content network ads were geared toward branding, with the company name as the ad title, and a general overview of our services as the description.

The Results

The results of the test have been very encouraging up to this point in time. Our site has seen an increase in direct traffic, with a reasonably low increase in cost. So how are we measuring success? Impressions do not readily lend themselves to tracking as adequately as clicks. However, through our analytics program, our team has been able to identify an increase in direct traffic, through the variables of bookmarking and direct site entry. Comparing stats over a year’s time, we saw an increase in direct traffic during the two months the campaign ran.

Through our testing, we have seen that content network ads can lend themselves nicely as a means to increase brand recognition. Although users did not click on our ads, they were exposed to our brand. Though this is not a sure fire way to increase conversion, it can be a cost effective way to get your company’s name out on the web.

Many advertisers have seen a large increase in their AdWords advertising expenses due to a sudden decrease in quality scores on their keywords. Keywords that once saw low cost-per-clicks and great quality scores have suddenly paused because advertisers can’t afford to pay the minimum bid. With the quality score being one of the largest factors in the minimum bids and ranking of keywords in Google campaigns, many advertisers are wondering “Should I begin looking to a new pay per click network?” While advertising on other networks can help extend the reach of advertising messages and present lower-cost alternatives, abandoning your AdWords account is not necessarily the best answer. There are several factors to consider when trying to improve a keyword’s quality score. Consider the information below when evaluating your Google campaigns.

What Google Looks For

Quality score is a measure of the user experience. Google reviews both the advertiser’s campaigns and landing pages to ensure that they are both of high quality. In measuring quality (according to Google AdWords), Google looks at:

• The keyword’s historical click-through-rate (CTR) on Google
• The relevance of the keyword to the ads in its ad group
• The quality of your landing page
• Your account history, which is measured by the CTR of all the ads and keywords in your account
• Other relevance factors

All of these factors are used to determine the quality score for each keyword within a campaign’s ad group. With these factors in mind, here are some tips to help improve your campaign’s performance.

Relevance

This is one of the most important factors of the user’s experience, and one of the easiest for the advertiser to control. Make sure that the keywords within your ad groups are assigned to a specific landing page for the product or service you are offering. If you are advertising a specific shoe, you don’t send the visitor to the women’s shoes category page.

Ad Content

Make sure that your keywords are mentioned in your ad text. I know this sounds like a no-brainer, but many advertisers overlook this when creating their ads. Although a generic ad about the company is great for branding, it doesn’t necessarily your quality score. Assigning a few keywords to each ad makes this task easier.

Original Content

Just as it is important to keep site content updated for SEO purposes, advertisers should keep original content on their site for quality score purposes. Google places a great amount of importance on unique content on a site to help improve the user experience. Although this task may seem time consuming, there are some ways to accomplish this task without a large amount of additional effort.

• Blogs – This is a great way to continue to add fresh content to your site. Having an RSS feed on your blog on your site can create fresh content every time you post.
• Product reviews – Not only are these great for the user experience, this is also a good way to have your visitors provide content for your site.
• Testimonials – These are always great for conversion purposes and can add fresh content at the same time.

 Although there is no sure fire way to guarantee a “great” quality score, the methods discussed above can help you get one step closer. Google is constantly changing the way it judges sites within your network, which makes it hard to keep up with the latest criteria. Just continue to update your site and your content, which helps with SEO too as a bonus. 

Having the ability to track your pay per click ROI is essential for running an effective advertising campaign. Many advertisers track click-through-rate or conversions to determine a campaign’s effectiveness. While these numbers do assist advertisers in determining which ad groups have the highest performance, there is still a missing link in determining which advertising outlets provide the highest return for overall spend. 

For example, we have seen that Ask sponsored listings tends to generate fewer clicks and a lower amount of conversion than that of Google. To an advertiser, it may appear that Google is the better performing advertising network because it generates more traffic and sales. However, traffic and sales do not necessarily indicate a better overall performance. Ask sponsored listings can generate a large amount of traffic at a lower cost per click. When comparing the overall advertising cost to the average conversion and sales amount, the ROI for Ask can actually prove to greater than that of Google.

Keep in mind that this is only an example. A well-optimized Google AdWords campaign can certainly outperfrom Ask and other search networks. The point is that a campaign with a large amount of traffic and sales does not always indicate high profitability.

For those advertisers wanting to track their ROI, here is a helpful tool from SEOMatric LLC. This PPC ROI Calculator, allows advertisers to enter their total monthly clicks, the average cost per click, the conversion rate, and average buyer purchase amount to reveal an estimated ROI on thier advertising spend. Advertising effectiveness does not need to be a guessing game. This and other ROI calculator tools can help you optimize your advertising spend to get a better Return on Your Investment.

Erica Scharringhausen is a Pay Per Click Account Manager for The Net Impact Web Design St. Louis Firm.