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5 tips to drive down your CPAs

Published: October 5, 2015

Author: Brian Lewis

Lower CPAs? Yes, please! Here are five tips to drive down the Cost Per Action of your social and search ad campaigns.

1. Relentlessly focus on your real goal

2. Embrace a ‘cross-channel’ mindset

3. Segment your audiences to better hunt for value

4. Try major creative variations vs. minor creative tweaks

5. Leverage technology, so you can do the value-add work that only humans can do


1. Relentlessly focus on your real goal

When you run a digital ad campaign, you need to do so with a concrete goal in mind for best results. This goal, i.e. the action that you care about, could be to increase site traffic, add new subscribers, boost purchases, increase app installs, or achieve some other digital event that adds value to your organization. While there are countless metrics that you can track for your campaigns, in the end most are just shiny objects that can distract you from your goal.
For example, if you have a campaign goal to drive e-commerce purchases from social, you can track the number and type of various ad engagements (e.g. comments, shares, etc.). Track as many metrics as you want, but relentlessly focus on your goal. If your efforts do not contribute to that bottom-line goal, then you are wasting your time and your ad spend. No CMO wants that.

2. Embrace a ‘cross-channel’ mindset

When you get right down to it, where your conversions come from doesn’t really matter. I can prove it with this little experiment: give me your ad spend budget and in return I will either give you 100 conversions or 25 conversions. Which do you choose? Of course you choose 100.
Okay, but what if I told you that the 100 came from Facebook and the 25 came from Twitter? Or that 100 came from Ad #1 on Facebook and Ad #2 on Twitter, and the 25 came from Ad #3 on Facebook and Ad #4 on Google Adwords? Does it matter? Did you change your mind about the fact that, for the same budget, you would rather have 100 conversions? No, you didn’t, because for the same cost 100 is better than 25, regardless of how you got the 100.
Congratulations! You have just embraced the cross-channel mindset. Channel is now just another characteristic of an ad, in the same way that your image, text, placement, and targeting options are just characteristics of an ad.
Now you’re free to manage your campaign budget holistically and dynamically adjust budgets across your ads, not your channels.

3. Segment your audiences further to hunt for value

You need to constantly hunt for value across your ads. I use the term ‘hunt’ very particularly because your prey, i.e. a cost-effective conversion, is elusive and moves quickly from audience to audience making it hard to find and catch. Remember that you are bidding for impressions, clicks, or conversions as part of an auction with other advertisers. How much you need to bid to win the auction is based on the popularity of your target audience among the other advertisers.
As advertisers enter and exit the auction for an audience (as their campaigns start and end) or as they change their bidding strategies, the cost of a winning bid changes. A good bid right now, and therefore a cost-effective conversion right now, might be quite different next week, tomorrow, or even in the next hour. The best strategy to drive down your CPA is to bid on many different audiences. They still need to be relevant, but the more audiences you bid on, the better your chances of finding good deals and hidden value over time. Start by segmenting your primary target audiences into smaller and smaller sub-audiences. Create variations on geography, age, gender, interests, keywords, etc. and you’ll soon discover the segments that provide the most value.
Bonus Tip #1: This segmentation process provides a bonus at no additional cost: paid research on your audiences and creative. You are essentially conducting a ton of mini-focus groups to see who within your primary audiences is most likely to convert, which messaging and imagery they react to best, and so on. The more you test, the more you learn. Your findings can be applied to other paid channels, your owned and earned efforts, and even your offline marketing. You’ve just found another way to help justify your paid campaign budget to your CMO!
Bonus Tip #2 (because one wasn’t enough): Never turn off a campaign forever just because its cost is high early on. Retain the right to reactivate campaigns later on.  The same logic that applies to good bids applies to bad bids. A bad bid (and therefore an expensive conversion) is only bad right now and may perform much better in the future. You might eke out some extra return on ad spend if you’re willing to give it another chance.

4. Try major creative variations vs. minor creative tweaks

If you already know that your campaign creative is amazingly relevant and resonates with your audiences, then you can fine-tune it with minor tweaks and variations to get it just right. But if you don’t yet know if it will perform, then you are better off exploring combinations of images, videos, and text that are very different from each other. In that case, you should test broad creative concepts, not minute copy changes. Once you identify the concepts that deliver your most cost-effective conversions, then you can start trying minor creative tweaks until you have found the perfect messaging for each of your audiences.

5. Leverage technology so you can do the value-add work that only humans can do

The days of manual bid and budget allocation are over. Programmatic tools have existed for a long time for display and have now arrived for social and search advertising. Many affordable solutions can automatically optimize campaigns on individual ad channels and some of the latest-and-greatest solutions can optimize a single budget across multiple ad channels. By leveraging technology, you can focus on the bigger-picture and higher-value activities like developing your overall digital strategy and exploring new creative concepts.

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