Understanding CPA in SEA: definition and use

In the world of referencing advertising, there are many acronyms which can sometimes be confusing for the uninitiated.

These include CPA (cost per share)a key term in webmarketing.

In this article, our Agency SEA will define what CPA is, how it works and how to use it effectively in your marketing campaigns. paid referencing (SEA).

Definition of CPA (cost per action)

Le CPA is a pricing method used in online marketing campaigns, particularly on advertising platforms such as Google Ads or Bing Ads.

This is a business model in which the advertiser pays for each action taken by an Internet user following the display of its advertising. These actions can be varied, ranging from a simple visit to a page to the purchase of a product, including a request for a quote, a subscription to a newsletter or a purchase of a product. newsletteretc.

What is a share?

In the context of the CPA, a share generally means performing a specific task by a user after clicking on an online ad. In other words, it is not enough for the user to click on the ad for it to be considered "successful"; they must also achieve the objective set by the advertiser (purchase, registration, etc.).

How does CPA work in SEA?

In a paid search campaign, the advertiser defines in advance the value it is prepared to invest for each action taken. This may be a fixed amount or a percentage of the sales generated by the campaign in question. This amount will then be used to determine the profitability of the ads and, ultimately, the allocation of the advertising budget.

Calculation bases

The cost per share is generally calculated on the basis of two elements:

- The number of actions carried out over a given period
- The total cost incurred over the same period

To obtain the CPA, we divide the total cost by the number of actions. For example, if a campaign cost €1000 and generated 50 actions, the CPA would be €20 (1000 / 50).

Budget optimisation

The main advantage of CPA is that it allows advertisers to accurately control their expenditure and adjust them according to the performance of their ads. This makes it possible to prioritise the most effective media and formats in order to optimise the overall performance of the campaign. What's more, this method also limits the risk of "waste" by only paying for concrete, measurable actions.

CPA versus other pricing models

Although cost per share has certain undeniable advantages, it is worth comparing it with other existing pricing models. These include

The cost per click (CPC): in this model, the advertiser pays each time a user clicks on its ad, without taking into account any actions taken after the click.
Cost per thousand impressions (CPM): here, advertisers pay according to the number of times their ad is displayed, regardless of clicks or actions taken.
The cost per lead (CPL): similar to the CPA, CPL is based on generating leads (or leads), i.e. potentially qualified sales contacts, rather than the completion of a specific action.

It is therefore important to choose the right pricing model depending on the objectives of your web marketing campaign, your budgetary constraints and your sector of activity.

Implementing an effective CPA strategy

To get the most out of a cost-per-action campaign, a number of best practices need to be followed:

Define clear and measurable objectives

The first step to a successful CPA campaign is to determine which actions are the most relevant to monitor and measure. So you need to ask yourself the right questions: what is the purpose of my ad? What specific action would I like the visitor to take after clicking on it? Depending on the answers to these questions, it will be possible to adjust the cost per action accordingly.

Continuous analysis and optimisation

Monitoring and analysing performance are essential for adjusting and optimising a CPA campaign. It is therefore important to regularly monitor key indicators such as the number of actions carried out, the total cost incurred and the rate of conversionto identify areas for improvement and make the best use of its advertising budget.

Segmenting and targeting your audience

In order to maximise the effectiveness of a CPA campaign, it is essential to target and segment its audience. This ensures that the advertisements reach the people most likely to carry out the desired action, while avoiding those who are not interested in the offer presented.

In short, CPA is an advantageous pricing model for advertisers wishing to control their expenditure and benefit from a measurable return on investment. However, it is vital to put in place an appropriate strategy to optimise the profitability of your SEA campaigns.