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What is Causing my Apple Search Ads Avg. CPA to Increase?

What does ‘Average CPA’ in Apple Search Ads Refer to?

The event that signals an acquisition varies from advertiser to advertiser but for Apple Search Ads, an Install is that event. So, the Average Cost Per Acquisition (Avg. CPA) is really just the Average Cost Per Install (Avg. CPI). The Apple Search Ads Avg. CPA can be calculated by taking the total Spend and dividing this by the total number of Installs. However, to understand changes in the Avg. CPAs, it’s more useful to express it in terms of the Average Cost Per Tap (Avg. CPT) and the Conversion Rate (CR) from Tap to Install. Even if you’re optimising your campaign to a Post-Install Event such as a registration, it’s still useful to investigate changes in Install costs since these changes usually carry over to the event costs.

Avg. CPA = Spend / Installs

Avg. CPA = Avg. CPT / Conversion Rate

How do I Find out if it is the Avg. CPT or CR Increasing my Avg. CPA?

First of all, it’s worth pointing out that it isn’t necessarily an either-or scenario. Deviations in the Avg. CPA can be the result of changes in both the Avg. CPT and the CR. To add to this, increases in the Avg. CPA seen overall for the campaign may not be reflected in any of your keywords and in this case, the increase is the result of high Avg. CPA keywords spending more than usual, and therefore, having more weight in your overall average. But let’s ignore the second point for a minute to go to the first step of the investigation.

It’s usually easier to see general trends over time in a graph rather than in a table and that’s where the Apple Search Ads Charts tab can help. You’ll want to compare the Avg. CPA against the Avg. CPT and against the CR to understand which metric is causing the increase. To do this, you’ll need to pick a date range that sufficiently covers the increase in the Avg. CPA. If the graph shows the Avg. CPT and Avg. CPA increasing in unison (see the first graph), then you can conclude that the CR is pretty consistent, and it is the Avg. CPT causing the increase. Likewise, if the CR is decreasing with an increasing Avg. CPA (see the second graph), then you can roughly see it’s the decreasing CR causing the increase in your install costs.

Once you have found out which metric is responsible for the increasing Avg. CPA of your campaign, you’ll need to find out which keyword(s) is causing this change at the overall level. If you have multiple Ad Groups running, start with the Ad Group that’s spending the most and go to the Charts tab for that Ad Group and select ‘Keyword’ on the sidebar to see the highest spending keywords for the date range of the increase. Check whether these keywords have had an increase in Avg. CPT or CR. Repeat this for the keywords that make up the majority of your spend. If you’re not having much luck in finding changes in Avg. CPT and CR metrics at a keyword level, it’s then time to look at whether the spend of low CR or high Avg. CPT keywords has increased over the period. A big increase in the daily spend of keyword(s) with a low CR and/or a high Avg. CPT can be enough to explain increases in the Avg. CPA seen overall for the campaign.

How can I Control an Increasing Avg. CPT?

The price you pay for a tap isn’t static; even with consistent CPT Bids, you can see fluctuations in the daily Avg. CPT. The most direct action you can take to lower the Avg. CPT is to lower your CPT Bids. This would be appropriate to do if you see the Avg. CPT repeatedly increase for a keyword as well as if you see a regular increase in the spend of a high Avg. CPT or low CR keyword.

With regards to how much you should lower the Bid by, remember that the Avg. CPT is exactly what it says it is, an average, and that you pay up to your bid price for a tap. If the bid is reduced by too much, you’ll be unnecessarily reducing the number of Impressions you’re likely to win. The CPT Bid can be roughly calculated by multiplying the CR of the keyword by your CPA goal and adding a bit on top. For example, if I had a keyword that was generating installs at an Avg. CPA of £2.25 with a CR of 50% and my Avg. CPA goal was £1.50, I would reduce the CPT Bid to slightly higher than £0.75, perhaps £1.00.

CPT Bid = (CPA Goal * CR) + a little bit extra

CPT Bid = (£1.50 * 50%) + £0.25

CPT Bid = £1.00

Another method for decreasing your overall Avg. CPT is to bid higher on keywords that have a low Avg. CPT. While this may seem counterintuitive, if you can increase the amount these low Avg. CPT keywords spend and keep their Avg. CPT low-ish, these keywords will carry more weight in the overall averages and bring down the Avg. CPT and, therefore lower the Avg. CPA of your campaign.

What Should I do to Improve my CR?

The Tap to Install CR represents the percentage of users that download your app within 30 days of interacting with the ad. Since the CR is a proxy of relevancy of your app for that search, changes in CR can reflect changes in your app’s appeared relevancy. For example, could a search that used to be highly relevant for app, now not be, perhaps due to a functionality change in the app? Or, could it be that you’ve recently changed your app listing and you’re now not communicating very well that your app is relevant for that search? If that’s the case, one way to improve your CR could be through a refresh of your app listing through updating your App Store Optimisation (ASO) strategy.

All the recommendations so far have made the assumption that you’re bidding on just Exact Match keywords, which is quite a big assumption to make considering that your ad can be matched to searches also through Broad Match keywords and Search Match. The Avg. CPT and CR of Broad Match Keywords and Search Match typically vary more than for Exact Match Keywords due to the greater variety of searches they match to. Because of this, Broad Match and Search Match should only be used for keyword discovery with your Avg. CPA optimisations applied to Exact Match keywords. However, if you’re consistently seeing high Avg. CPAs for Broad Match and Search Match, lower the CPT Bids – after all, you’re trying to discover new keywords that don’t cost a small fortune!

Know the Difference Between Trends and Fluctuations

While it is tempting to reduce the bids after one bad day of high costs, it’s important to not act too quickly as this can result in you needlessly reducing the reach of your campaign. There isn’t a set number of days for when fluctuations become trends and it’s much better to go off the number of taps a keyword generated to draw reliable conclusions – you don’t want to be taking the Avg. CPT and CR of one tap as gospel!

So, when reviewing the Avg. CPA of your Apple Search Ads campaigns, think in terms of Avg. CPT and CR, not just Spend and Install count. To explain increases in the campaign’s Avg. CPA, look at your keywords and start with the highest spending since these are most likely to have the biggest influences on the Avg. CPT and CR of the campaign. And, don’t forget that the Avg. CPT and CR can remain relatively consistent for all your keywords, but the Avg. CPA of the campaign can increase if there are changes in the proportion of spend per keyword. Finally, don’t be too hasty with your amendments, you need to make sure you have the data to support your conclusions.