Internet Marketing Metrics CPA, CPL and ROI

Internet Marketing Metrics Final Chapter:

CPA, CPL and ROI:

CPA is the ‘Cost Per Action’ and this is a term that becomes relevant when you start paying for advertising.

If you use Google AdWords or Facebook Ads to try and drive more visitors to your website, then this is a form of PPC advertising.

That stands for ‘Pay Per Click’ and it basically means that you’re paying a certain amount for each person who clicks on your ad and thereby paying a certain amount for each new visitor.

PPC tells you how much you are spending and allows you to tightly control that number.

But it tells you nothing of the value that you’re getting in return. This will elevate your visits and that’s all – you want to elevate your sales.

This is where ‘CPA’ comes in and uses goal tracking to show you how much you are spending for each person to buy a product from you.

If you use Google Analytics and combine that with AdWords, then you can literally see how many of the clicks you get from your ad campaign are resulting in sales and this in turn allows you to work out the average amount you pay for each new sale.

Meanwhile, a ‘CPL’ is a ‘Cost Per Lead’, which tells you how much you are paying for leads. A lead will often be considered a warm lead who subscribes to your mailing list – but you could also choose to count highly engaged visitors as your warm leads.

To calculate a CPL in this way, you could look at your number of visitors and then compare this to the average page views per visit or the average time on site.

That way, you can work out the percentage of your visitors who end up being engaged visitors and therefore leads.

Of course you can also calculate your CPA and CPL without using Google Analytics or AdSense.

If you are paying an SEO company to help your site to climb the SERPs for example, then you can calculate your CPA by looking at the amount you’re spending on that marketing versus the number of sales and the amount of profit you are making.

This is simply all your costs versus all of your profits.

Likewise, you can work this out if you sell through a mailing list by looking at how much you are paying for each lead who subscribes and then looking at the lifetime value of each subscribe. How many of them read your emails and how many of them buy your products?

How to Improve CPA and CPL: