Why Is Your Facebook CPA So High, and How to Lower It?

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).

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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.

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.

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.

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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. 

For a consolidated view of your actions, use a real-time cross-channel tool like Madgicx’s One-Click Report. With a centralized dashboard where you can not only view your Meta actions, you can see and blend Google, Shopify, and TikTok metrics in one place. Try One-Click Report for free.

A/B test your ads

Creative testing is a form of A/B testing, and using dynamic creative is one way of doing it. It’s more far-reaching and defines a process of making small and incremental adjustments to creative versions.

These adjustments can be to ad formats, ad copy, and placements to see which ad performs better with the same audience. By implementing A/B testing, you can direct your budget into better-performing ads to increase the chances of campaign success.

Beware of Facebook ad fatigue

Consumers are overstimulated as it is, and ad fatigue is real. To work around this, you should create enough engaging content to keep your audience interested enough to do what you want them to do. Ad fatigue is also one of the reasons why Facebook ads stop converting. It’s a great idea to have lots of fresh and exciting content to support your ad campaigns.

Adjust audience targeting

If your ads aren’t delivering or producing the ideal results, you should analyze your target audience. Zoom in on your audience interest targeting to see if there are recommendations to add to the list or broad interests you can remove and also to see how various audience segments perform against others. 

While Meta’s audience tool provides interest recommendations, I prefer using Madgicx’s Targeting Insights, which uses AI to analyze target audience segments even further, giving you clear indications of how different segments respond to your ads. As a result, this leaves little guesswork in working out where to put your budget.

Launch at the best times

Yes, launching your ads at the best times is still an effective way of optimizing your ad account. Madgicx’s tool, Auction Insights, has a widget called Days & Hours that gives you a breakdown of the times your Facebook ads receive the best interaction. Use this data to inform the launch of your campaigns, and you can not only improve the performance of your ad but also lower your cost per action as a result.

Optimize your landing page

It doesn’t matter how many ads you run if your landing page isn’t geared for conversions.

The destination link you set for your ads should offer a great experience for your potential customers. Check bounce rates and page load speed, and make sure your ad copy is clear and relevant to the ad that’s sending people to the web page.

Moreover, your creative elements on the page should align with your ad to build trust and brand recognition. Furthermore, use compelling call-to-actions to prompt users to take your desired action.

Adjust bids

Implementing CPA bidding lets you tightly control your ad budget and how much you are prepared to spend on a certain action. By monitoring your bids and adjusting them accordingly, you can lower your cost per action. 

Furthermore, the AI bidding feature in Madgicx lets you adjust your bidding according to the performance of different segments of your audience. It reallocates your budget between these segments to ensure you invest in your more profitable audiences. Try Madgicx free for 7 days to give AI bidding a whirl. 

Measure Facebook CPA with One-Click Report

Madgicx offers a simpler solution than Meta to track your Facebook CPA with One-Click Report - a consolidated dashboard of data you can customize. Browse One-Click Report’s prebuilt templates, drag and drop widgets to your liking, and show your data how you prefer. You can also view blended metrics (net profit, ROAS, LTV, CAC, etc.) across platforms like Google Ads, GA4, Shopify, and TikTok accounts. Everything you need to see in one place.

Moreover, One-Click Report is THE ultimate tool to track your preferred KPIs and cross-platform reporting. You can finally ditch the spreadsheet report template and formulas in favor of the click of a button. Try One-Click Report and see for yourself.

Conclusion

Your Facebook cost per action is an important number to watch, but only once you have defined your best actions in your default view. Then, you can easily track your CPA, and you’ll know what to do if the cost spikes.

Most importantly, once your data is more meaningful and easy to understand, it makes improving your Facebook CPA much easier to tackle. If you pay attention to the best practices outlined in this article, you should be able to lower your Facebook CPA.