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CPA or CPC for new offer?

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# 1
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 Hi for a special offer like discount in price I have to do an ad in Google ad words, so which one is better to select CPC or CPA. If I select CPA does the no of times the ad shown will reduce? If I opt for CPA does it will worthy? At the end of the month does the total cost will exceed than setted monthly cost.

Re: CPA or CPC for new offer?

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# 2
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Hi Anne,

 

It all depends on your strategy and product you are promoting. Of course, Traffic will be reduced if you opt for CPA. The CPA will work well if there is a history of information for past three weeks or one month.

 

Google will analyse the potential and does not show up your ad if there are less chances of conversion. For Example, In the past few weeks, sale happen only from a particular keyword. Then google will focus more on that particular keyword and try to use budget in showing that ad regularly till a conversion happens.

 

No need to worry about the budget exceeding in the end of the month. It will be adjusted by giving required conversions.

 

If you are confident about your discount offer, then go for CPA irrespective of traffic you are getting.

 

If You want to get more traffic then go for CPC. It all based on your product order value.

 

Thanks,

 

-Syed

 

 

 

Re: CPA or CPC for new offer?

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# 3
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Hi Syed,

 

Thank you,I think CPA is good for those offers which acquires better profit within one sale itself  isn't it?

Re: CPA or CPC for new offer?

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# 4
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Hi Anne,

 

You are right, You will get higher profit even for one sale. For example, your budget is $100 and you got one sale after spending $10. 

 

If you continue CPA model, You may get another sale at spend of $12. I mean at extra spend of $2.00 you might get another sale.

 

Useful Tip: As per your order value, if you are ready to spend $10 for each sale, Then best practice is to keep on increasing the budget until your CPA is below $10. You will keep getting profits....Smiley Happy

 

-Syed 

Re: CPA or CPC for new offer?

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# 5
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Hi Syed,

 

Excuse me ,Could you please explain how this increase happens ie  $12 for second sale after spending $10 in the first sale.I want some more info about how the spend changes after the first sale ?

Marked as Best Answer.
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Accepted by topic author Anne h
September 2015

Re: CPA or CPC for new offer?

Follower ✭ ✭ ☆
# 6
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Sure Anne,

 

Imagine that your keywords are costing around $1.00 or $1.50 per click.

 

You have spend $9 but you got no conversion. Then At spend of $10 (i.e one particular keyword got a click and customer landed on your website and made a sale. That click has cost you $1.00)

 

From the start of the campaign, CPA model was focusing on that particular keywords (may be top three keywords) and showing the Ad Copy most frequently. As There was regular conversion for that keyword. So, in-spite of no sale till $9.00, google still displayed that particular Ad Copy from those top keywords and luckily visitor purchased.

 

For Example:

 

An Online Florist has budget of $100. His most selling products are Rose Flowers and Lilies. And order Value for Rose Flower is $20 and Lily is $18.

 

Now That Florist will select CPA model and fix CPA value as $10 ( that means, he is ready to spend max $10 for a sale ).

 

He spends till $10 and his Rose Flower is sold ($20 revenue), his profit is $10.

 

He is happy and continues his campaign, suddenly, after a click of $2.00 he got a sale for Lily:

 

Then, His Total Advertising, Spend is $12.00 ( Total Revenue = $38 ($20 + $18) )

 

----

 

Its slight confusing, but i tried this simple example for your clarity.

 

-Syed

 

Re: CPA or CPC for new offer?

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# 7
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That means,If we got a reliable profit in one sale then we can find success with CPA if have luck with keywords isn't it?