Learn about Meta’s cost-per-action options and why they can be so pricey. See what actions you can use, and learn how to lower your Facebook CPA.
Why are certain actions that users take more expensive than other metrics? When advertising on Meta, you can be billed in numerous ways for your ads. One of the ways is cost per action, or CPA, which we’re exploring in this article. Let’s examine how it’s calculated, what CPA costs look like by industry, and what you can do to lower yours.
What is Facebook CPA?
The first important thing to understand is that cost per action is a concept, not a specific metric you’ll find in the Meta Ads Manager. Cost per action applies to the cost of every kind of action a user can take (click, video view, subscribe, like, buy) related to your Meta ads.
Cost per action is also not to be confused with cost per acquisition (how much it costs to acquire a new customer, which can include things aside from actions) or cost per result (cost of the desired result). Often, cost per action and cost per acquisition are used interchangeably, which isn’t always accurate. Think of them as sisters, not twins.
Cost per action is a physical action that a user takes, like a click, subscribe, view, purchase, etc. Cost per result, however, is a broader term, including impressions, reach, and related to what the Meta system does, versus the user. So, you can say that every cost per action can be seen as a cost per result, but not the other way around ;)
Cost per action is a way of viewing your ad spend in relation to the action that a user has taken and is not necessarily a purchase. For example, if you monitor the cost for each link click versus impressions (CPM), this would be cost-per-action.
Why choose to pay per action?
You have tighter control over the amount you pay for the action.
Let’s say you have a product that costs $100, and you want to make sure that you don’t spend more than $15 to sell it. Monitoring the cost per action against the number of units sold will let you see how your budget is faring. Seeing costs presented like this lets you break them down in an easily translatable way for e-commerce products. For businesses selling products online, it often makes more sense to calculate your ad costs this way.
If you look at your marketing budget per product, there should be a limit on how much of your advertising budget you’re prepared to pay for the desired action. Otherwise, you may end up making a loss.
How to calculate Facebook CPA
Luckily, Meta calculates this for you, but you need to add your chosen action to your default view or your reports in the Ads Manager. You can view this information at the campaign, ad set, or ad levels in your default view and ads reporting. Facebook lets you get super specific with the action options that it provides, so your reports become more meaningful to your unique business needs.
Before calculating your Facebook CPA, you must determine which action is most meaningful to you. Broadly, these conversion-related actions can be subcategorized by:
- Downloads
- Purchases
- App installs
- Link clicks
- Outbound clicks
- Video views
- Post engagement
- Website conversions
- Website leads
- Mobile app installs
- Mobile app purchases
- Offline conversions
As you can see, these actions straddle both conversion and engagement categories of metrics and can be broken down further by conversion device, carousel card, destination, post reaction type, brand, video sound, and view type. Meta lets you dive deep into the various types of actions so you can hone in on specifics.
How to add an action to your default view
Go to the Ads Manager and open up the campaigns view, where you see all your ads listed.
You can add actions to your view in the Meta Ads Manager if you click ‘Columns: Performance.’
A menu will appear with more categorization options and presets you can choose to compare your attribution settings. Select the last option, which is ‘Customise columns.’
In the next screen, you can search for the metrics you want to see. You can type in ‘cost per’ to bring up all the metrics that include this phrasing to view all the possible cost-per-action metrics.
Go through the list and select the actions you want to include in your view. Afterward, you can save your selection as a preset to use again by checking the box in the bottom left of the screen.
If you scroll down under ‘Conversions,’ you’ll find a list of metrics that you can select by ticking the boxes and can specify whether it’s tracking the full count, unique (first-time customers), the value, cost, and unique cost (for those first-time customers).
Go through the list, choose the most meaningful actions for your business, and click ‘Apply.’
You’re all set and will see your new columns of data in your default ‘Campaigns’ view.
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What is a good Facebook CPA?
Your cost per action varies wildly depending on the industry. Here is a breakdown of cost per action by industry from Business of Apps. Use this to gauge where you stand with your defined actions and see if there is room to improve.
FB CPA, by industry Infogram
Image source: Business of Apps
The average cost per action, according to Instapage, is $18.68. You’ll notice the cost varies significantly across industries, so make sure you set a realistic goal when looking at your Facebook CPA.
Image source: Instapage
How to lower your Facebook CPA
Using cost-per-action helps maximize your return on investment and control your advertising costs because you only pay for a completed action.
However, these actions are often more costly than impressions or other engagement metrics. This is because the user did something; they were inspired into action, which has a higher value for the advertiser. Here are some tactics to lower your Facebook CPA.
Leverage data-driven decisions to choose your actions
Don’t guesstimate your way through this process. If you see that it’s cheaper for a certain action than another and it leads you to the same end result, adapt your campaign goal. For example, if a purchase action is expensive to drive, but a messaging conversation is cheaper and usually ends up in a sale, shift your focus to message-related goals.