Which Bid Strategy Should Sara Use if Her Goal Is to Get More People to Call Her Local Catering Business?

Which bid strategy should Sara use if her goal is to get more people to call her local catering business?

  • Cost-per-thousand-impressions (CPM)
  • Cost-per-view (CPV)
  • Cost-per-acquisition (CPA)
  • Cost-per-click (CPC)

Right Answer:

  • Cost-per-acquisition (CPA)



Cost per acquisition (CPA), also known as cost per conversion, cost per action and pay per acquisition (PPA) is an online promotion pricing pattern where the sponsor funds for a particularised addition – for example, a sale, click, or form submit e.g.,

  • contact request
  • newsletter sign up
  • registration

Direct response advertisers frequently acknowledge CPA as the perfect way to buy online advertising, as an advertiser only pays for the ad when the desired acquisition has occurred. The desired redemption to be executed is concluded by the sponsor.

In subsidiary marketing, this means that advertisers only pay the affiliates for leads that result in the desired action such as a sale. This removes the jeopardy for the advertiser because they know in a progression that they will not have to pay for bad referrals, and it encourages the affiliate to send good referrals.

The formula for CPA is the Total cost of (Campaign/ad group/keyword) / total number of leads recorded i.e. CPA = Total Cost / Total Number of Leads.

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