Question

Topic: SEO/SEM

Is Cpa A Good Kpi Still?

Posted by Anonymous on 5/24/2006 at 2:57 AM ET 125 Points
Hi,

I am beginning to feel that CPA is widely & carelessly used which can be rather misleading often.

I have been monitoring our top seller for weeks. We did an test, by bumping up the max bid. The result is,

1) Impression grew twice in number.
2) CTR grew marginally low 1%.
3) CPA grew by 30%.
4) Conversion rate remain the same.

now that I need to do a routine report, I will most definately look at these KPIs, and with CPA mostly in my mind, to take the best course of action.

However

The result is also,

1) Clicks grew 110%, Double.
2) Tho the conversation rate is the same, by the conversation/ppc transaction now double than previous month.
3) CPA grew by 30%, mean that for every dollar I pay 30c extra to get more than a double of sales!!!...

Now...

Can anybody please comment, I would like to hear all opinion
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RESPONSES

  • Posted by ReadCopy on 5/24/2006 at 3:40 AM Member
    Remember there isn't a formal link between CTR and CPA, its possible to have a CTR of 1% and a CPA of $1, I guess its also possible to have a CTR of 100% and a CPA of $1!

    Online marketing is like driving a car, you have accelerator, brake, gears and steering to consider.
    Do them all in perfect harmony and you will have an incredibly smooth ride. Be a little heavy on your brakes, or steer a bit irratically will still get you to your destination, but the ride not be as smooth!

    I guess you need to look at whats most important to you CTR, keyword cost or CPA (my guess is CPA should be the most important) and stick to that metric, but tweaking your other factors to get the smoothest possible ride.

    :-) Good Luck
  • Posted by Pepper Blue on 5/29/2006 at 1:02 PM Accepted
    Nice question.

    If you were my customer I would look at increasing the conversion rate, thus driving down your CPA.

    Almost always when you increase your max. CPC your clicks will increase but if this doesn't lead to an increase in conversions you have accomplished nothing except spend more money.

    Since increasing conversions is not really a function of PPC per se (this responsibility is handing off to the landing page "department") you need to change hats and address this problem separate from the PPC KPIs.

    You didn't mention what position you were in prior to or where you are are now (average) this is also key as #1 may not be the best position. #3 and #4 usually provide a good value.

    Lots of levers and dials to shift and twist, isn't there?

    Now, if you need help increasing conversion that is another question to post or feel free to contact me offline and we can discuss.

    Good luck.
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