What is the difference between CPA and eCPA calculator? Know your KPIs
Yes, it's just another acronym in the vast dictionary of digital marketing terms. If you've read AdSEO's previous articles on digital marketing (otherwise we highly recommend doing so), you're already familiar with payment models such as CPM (cost per view), CPC (cost per click) and the somewhat more abstract CPA (cost per action). Naturally, if you are wondering - what does the "e" in front mean? Let's try to answer it and find out how the eCPA calculator can add to your arsenal of marketing tools.
Let's remember - what is a CPA?
In order to be able to move on to the eCPA calculator, we should first remember what CPA or "cost per acquisition" means. CPA is a digital advertising charging model where you pay for selected goals or conversions. In this case, a conversion is an action of your choice that, after the user completes, earns the advertiser a contractual payment.
Often the goal is a sale, but depending on the industry or marketing strategy, it can also be a newsletter subscription, call, registration or filling out a contact form.
The CPA formula is quite simple: total amount spent on the advertising campaign / conversions received.
So, if you have an online jewelry store, there is a good chance that your chosen action will be sales. Let's imagine that you invested 1000 euros in advertising and got 10 sales, so your CPA will be 100 euros.
One of the main advantages of this model is that the advertiser pays only for the result, eliminating the possibility of fraudulent results, such as fake view CPM.
What is an eCPA calculator?
It is important to mention that CPA is not only an important indicator of advertising effectiveness, but also an advertising buying model. Having remembered its basics, we can move on to the eCPA calculator. In this case, the "e" stands for "effective," or the actual rate that tells you what your CPA would be regardless of the chosen advertising model, that is, if you were buying conversions instead of impressions, clicks, and the like.
The eCPA calculator is extremely relevant for all performance marketing or performance advertising specialists, as it helps to standardize the desired result during any campaign. This means you can calculate the desired eCPA even for a CPC or CPM campaign. Thus, eCPA and CPA are two sides of the same coin, but the former only counts for non-CPA campaigns.
How to calculate eCPA?
Perhaps, you have already noticed that when planning a campaign based on the CPA model, eCPA is also calculated and their indicators will coincide. It's different if your goal is to plan a campaign based on your desired eCPA. In this case, you have to rely on guesswork and perform back calculations. Depending on the payment model offered by the publisher, you will need to know or predetermine:
- Average CTR (click through rate)
- Average page conversion rate
- Your target eCPA
Example: The publisher offers you a CPM of €25 and your target eCPA is €50. The publisher also shares that the average page CTR for the ad placement you are considering is between 0.05 and 0.1%. You can tentatively set the conversion rate of the advertiser's (or your) page to 1.5%. The eCPA calculator in this case will look like this:
| A | Target CPA | 50 EUR |
| B | CPM | 25 EUR |
| C | Buy on sale | ? |
| D | Preliminary CTR | 0.05 % |
| E | Clicks achieved | (W x D) |
| F | eCPC | N/A |
| G | Preliminary conversion rate | 1.5 % |
| H | Conversions achieved | (L x W) |
| I | Total cost of impressions | (W x C) / 1000 |
| J | Ecpa | (I/H) |
Now let's fill in the blanks in the equation and make sure the campaign is implemented with the target eCPA of €50:
| A | Target CPA | 50 EUR |
| B | CPM | 25 EUR |
| C | Buy on sale | 1000 EUR |
| D | Preliminary CTR | 0.05 % |
| E | Clicks achieved | 500 EUR |
| F | eCPC | N/A |
| G | Preliminary conversion rate | 1.5 % |
| H | Conversions achieved | 7.5 % |
| I | Total cost of impressions | 25000 EUR |
| J | Ecpa | 3.333.33 EUR |
From the obtained results, we can see that it will not be possible to achieve the set goal with such a budget. However, if we managed to agree a lower CPM with the publisher, for example 15€, and we optimized our CTR to at least 0.1% and improved the conversion rate by about 2%, we could expect a completely different result. Sound confusing? Contact AdSEO professionals and do without additional tables. A successful advertising campaign requires a lot of attention and skills, so you will always achieve the best results with the help of competent specialists.
Why use an eCPA calculator?
Doing these calculations in advance gives you a huge advantage as you can determine what CPMs and CTRs would work for your campaign with your budget. This information will help you realistically set expectations and choose an advertising channel. However, it is not worth focusing only on the eCPA indicator - in this case, you risk burying the creative vision of advertising under numbers and tables. Don't miss the opportunity to discover more useful insights beyond selling price.