What is CPA (Cost Per Action)?

Cost per action CPA is a web marketing campaign pricing method based on an Internet user's completion of a specific task (online purchase, form validation, newsletter subscription).

This pricing method is very interesting because it guarantees advertisers that they will only pay for the achievement of specific objectives defined in advance. However, this operation has its limits because it does not guarantee the achievement of a significant number of objectives at a given price.

On Google Ads, CPA “pricing” is more of a semi-automated management mode based on a forecast price for achieving campaign objectives rather than a pricing mode (which remains CPC). There is also CPM (Cost Per Thousand Impressions).

cost per click (CPC)

Calculating Average CPC

The average cost per click (CPC) is calculated as the ratio of the total amount (cost) charged for your ads divided by the total number of clicks.

Calculation formula: Cost / clicks = average CPC

Cost per click difference: Average CPC and Maximum CPC

Please note: Average CPC and maximum CPC are two different things. The latter is the maximum amount you are willing to spend for a click on your ad. The average amount that is charged for a click cannot exceed your maximum CPC (which is the maximum bid)

Example: If a keyword receives two clicks, one billed at €0.40 and the other at €0.60, the average Cost per Click (CPC) for these 2 clicks is €0.50.

The advantages of the CPC compensation model

  • Achieve your goals by generating traffic
  • Customize your campaigns with finesse
  • Measure CPC and optimize your campaigns
  • Testing the relevance of a landing page
  • Choose the format and type of ads you want
  • Choosing Manual or Automated Bidding Strategies

Reduce your CPC to boost your profitability

Google Ads advertisers are always looking to improve their CPC while improving the quality of visitor traffic – thus they tend to reduce their acquisition costs while promoting the level of conversion. Your average CPC can be significantly reduced by improving your Quality Score – Google's famous Quality Score. According to Google, your quality score is affected by:

  • “ Expected click-through rate (CTR): Indicates the likelihood that a user will click on your ad when it is displayed.
  • Ad relevance: How close an ad is to the intent associated with a user's search.
  • Landing Page Experience: Indicates how relevant and useful your landing page is to users who click on your ad .

Other pricing methods than cost per click

Cost Per Thousand Impressions(CPM) and Cost Per Action(CPA) are alternatives to CPC.