What Is CPA And How Does It Affect My Ecommerce Business?

Posted on

CPA stands for Cost Per Acquisition, and in simple terms, it is the total cost that each sale generated from your digital marketing investment cost you. It’s important to note here that the CPA varies from each industry, business and product in question. There is no one ideal CPA which you must strive to attain- rather, achieving a perfect CPA can only be done through a gradual process of self evaluation and analysis. 

Why is it important? 

CPA is extremely important as it is one of the few marketing metrics which directly, in solid quantitative terms informs a marketer about the revenue generated from his advertising spend. While conversion rates normally just give an inference of how well your marketing efforts are proceeding in general, Cost per Acquisition can give you exact numbers for how well a particular campaign is doing and what your precise returns on investment are. 

Where is it used? 

Cost per Acquisition is a metric that is used in a variety of platforms and methods of paid marketing. These include, but are not limited to: 

  • Social Media Marketing
  • Email Marketing
  • Affiliate Marketing
  • Content Marketing
  • Pay-per-click Marketing
  • Search Engine Optimisation 

How do I optimise the CPA for my Ecommerce Business?

There are some strategies that you can follow in order to optimise your CPA, and these will help you immensely in bettering your marketing strategies. 

  • Study your budget: It’s vital for any ecommerce business to properly gauge their own advertising budget and optimise their CPA accordingly. A strict and limited budget would call for a more conservative CPA, and you should ideally target only limited and high-yielding terms and focus points. A more liberal budget can allow you to experiment a bit more with your CPA and target narrower domains as well. 
  • Define your economic goals: You need to determine where your ecommerce business stands currently, and what is more important for it- getting exposure via widely spread marketing endeavours, making a profit or simply breaking even. How important your profits are to you at the moment are essential in determining what your efforts should be in optimising your CPA. 
  • Choosing the right medium: There are various digital marketing mediums you can employ (which have been listed in the previous section) which you can employ to satisfy your business’ advertising needs. An important part of optimising your CPA is choosing the right medium in order to ensure that you get maximum returns on your investment and minimise wasteful expenses. 

Read About Semantic Indexing – https://www.digihashtag.com/what-is-semantic-indexing/