4 Steps on How to Reduce Cost Per Acquisition

One of the most critical KPIs healthcare marketers track in digital advertising campaigns is the cost per acquisition (CPA). Understanding how to reduce your cost per acquisition enables healthcare marketers to improve a campaign’s ROI while planning future budget allocation.  Lilia Tse, Co-Founder and CRO of Adfire Health explains, “Measuring CPA is vital for any healthcare marketer trying to disrupt the marketplace.  CPA allows for sustainable growth by providing a measurable metric to evaluate campaign effectiveness, allocate budgets wisely, and optimize marketing strategies.”

This guide walks you through four critical steps with corresponding best practices to demonstrate how to reduce cost per acquisition in healthcare advertising campaigns. 

Article Breakdown

1. What is Cost Per Acquisition (CPA)?
2. Step 1:  Handcraft HCP Audiences
3. Step 2: Develop High Performing Campaign Materials
4. Step 3: Setting Up Campaigns To Maximize CPA
5. Step 4: Measure & Optimize
6. See It In Action: Why Measuring CPA Is Important for Healthcare Advertising Campaigns?

What Is Cost Per Acquisition?

Cost per acquisition (CPA) is the total cost to acquire a conversion. A conversion is a  desired action taken by a user, such as booking an appointment, downloading content, making a purchase, or subscribing to services.

Determine CPA by dividing the total advertising spend by the total conversions you acquired from the campaign.

Step 1: Handcrafting HCP Audiences

When advertising a specific service or product, be selective in choosing an audience. The audience should be large enough to cast a wide net but also specific to reduce the number of unqualified leads that could save ad spend.  Crafting HCP audiences based on a variety of traits, including, but not limited to, 

• License Type,
• Specialty,
• Prescribing Behavior, &
• Location.

Using this data, build a highly-qualified audience to maximize your advertising budget and reduce your CPA.

The Benefits

Handcrafting the right audience helps reduce your CPA for various reasons.

• Increase Relevance: Tailor creatives to the needs and preferences of a particular group. When content is relevant, the target audience is more likely to engage.
• Build Customer Loyalty: Build trust and loyalty by consistently delivering relevant content to target audiences. Satisfied customers are more likely to become repeat buyers and advocates for your brand.
• Reduce Ad Fatigue: Constantly bombarding the same message to a broad audience can lead to ad fatigue. Rotate messaging or tailor content to specific audiences to keep content interesting.
• Gain a Competitive Advantage: A well-defined target audience helps differentiate brands from competitors. Highlight unique selling points that resonate with a particular audience and position yourself as the preferred choice.
• Be Compliant and Ethical: Targeting audiences reduces the risk of sending inappropriate or irrelevant messages to individuals who may find them intrusive.

Step 2: Develop High-Performing Campaign Materials

Develop campaign creatives following industry best practices before launching a new campaign. Creatives may include your landing page, ad copy, graphics, images, and videos.

Improve The Landing Page User Experience (UX)

The user experience is crucial to engage visitors, encourage conversions, and build a positive perception of your brand or offer. Consider these steps to guide your landing page creation:

Make Ads Easy to Understand

Ads drive users to your landing page, so optimize your ads to ensure engagement, clicks, and conversions. Consider these tips for optimizing CPA ads.

• Use Highly Relevant Ad Copy: Align your ad copy with keywords related to your offerings.
• Highlight The Main Value Proposition. Users should know why they are engaging with your ads.
• Tell Users What They Should Do. Ensure your ads convey the action users should take once they reach your landing page.

• Keep Brand Visuals and Messaging Consistent. When users click from the ads to a landing page, it should feel like the same company.
• Keep Visuals Clean and Uncluttered. Busy visuals can overwhelm the viewer. Focus on a single point for the ad.
• Use Relevant Imagery or Video. Only use images that directly relate to your solutions and reinforce your message.

Evaluating Creatives

As you curate content for your advertising campaign, consider if it will resonate with your target audience. Here are a few tips for evaluating your creatives:

1. Have more than one person look at each creative before launching the campaign.
2. Ensure the visual layout and design are appealing and engaging.
3. Utilize multiple ad versions with varying designs and ad copy for A/B testing.
4. Refresh the ad creatives monthly (if possible) or quarterly at the very least.
5. Leverage seasonality to deliver ads that appeal to your audience at the right time of the year.
6. Include the benefits new clients will receive for engaging with your ads and becoming new customers.

Step 3: Setting Up Campaigns To Maximize CPA

Many key tactics will elevate your advertising performance and drive success in your CPA campaigns. From defining clear objectives to accurately setting up your conversion tracking and bid strategies, we’ll walk you through some best practices to reduce your CPA and maximize your advertising budget.

Use Tracking Pixels

When determining CPA for a campaign, always set up a tracking pixel. A tracking pixel helps  monitor website traffic events and conversion actions. Follow these tips to set up tracking pixels.

1.  Generate the Pixel Code: Receive a tracking pixel code when creating an account on the tracking platform. This code is a small snippet of JavaScript or an image URL that you need to place on your website’s pages where you want to track user actions.
2. Add the Pixel Code to Your Website:
   • For JavaScript-based Pixels,
     • Copy the tracking pixel code from the tracking platform.
     • Log in to your website’s Content Management System (CMS) or access the page code where you want to place the pixel.
     • Paste the pixel code just before the closing </head> tag of the HTML document for site-wide tracking or just before the closing </body> tag for specific page tracking.
   • For Image-based Pixels
     • Obtain the image URL from the tracking platform.
     • Insert an image tag into the HTML code of your website’s pages where you want to track user actions.
     • Set the “src” attribute of the image tag to the URL provided by the tracking platform.
3. Test the Pixel: After adding the tracking pixel code, test it to ensure it’s working correctly. Most tracking platforms have debugging tools or browser extensions that can help you verify if the pixel is firing and capturing data.
4. Define Tracking Events: Depending on the tracking platform, you may need to specify which events you want to track. These events could include page views, form submissions, button clicks, purchases, or other specific interactions.

Start By Maximizing Brand Awareness, NOT Conversions

When starting a new healthcare advertising campaign, focus on brand awareness because your target audience isn’t familiar with your brand.  Avoid optimizing the campaign’s conversion performance immediately, especially if the new marketing initiative and market education efforts have been minimal. Get more engagement with your ads; when ads run for at least three months (see below), collect key insights on audience engagement, and optimize your campaign with conversions.

Most advertising platforms use machine learning to determine how audiences engage with your ads so they can optimize ad delivery and performance. Google Ads, for example, uses an algorithm that requires sufficient data on user behavior, ad interactions, and conversion patterns before it can start successfully tracking conversions.

Utilize Site Retargeting

Retargeting website visitors is a powerful strategy to stay top-of-mind with your target audience. Retargeting allows brands to reconnect with those who have already engaged with your campaign, creating a better chance of converting visitors.

Run A Campaign for a Minimum of Three Months

Advertising campaigns require testing and experimentation upfront to dial in the creatives and see what performs the best. It’s necessary to give your campaign enough time to generate quality results.

Depending on your customer acquisition process, guiding a new lead through the customer journey can take time. To understand your CPA better, you should run your campaign for at least 3three months.

Step 4: Measure & Optimize

Consistently monitor, analyze, and make updates as your campaign runs to optimize its performance. Letting a campaign remain stagnant is a sure way to lose money and sales opportunities.

Determine which creatives from your A/B testing work best, switch out creatives if necessary, and adjust audience, budget, and campaign settings. Break down the HCPs engaging with your marketing materials. Include what creatives they engage with, what days, what time, and more. Segment your results by the following metrics:

• License type
• Specialty
• Location
• Address
• Device-used
• Time stamps
• Number of impressions
• Number of clicks.

Comprehensive measurement and reporting helps marketing and sales teams understand the subsequent best actions to take to drive conversions.

See It In Action: Why Measuring CPA Is Important for Healthcare Advertising Campaigns?

Imagine getting healthcare professionals to order a free sample of a migraine drug for your brand launch and debating how much to advertise on mobile & in-app,  sponsor ads in popular email newsletters, or use social media advertising.

How do you make the right decision? (Hint. This article has just explained it.)

Tracking CPA. It will help you understand the cost per channel to allocate their spending effectively.

To start, you determine that you want to reach PCPs, create a beautiful landing page with a clear message and develop advertisements to drive traffic to your landing page. You spend $1,000 per month equally on each advertising channel and ensure the campaign is appropriately set up and tracking pixels are firing correctly. Each time an individual completes a form for the free sample of the migraine drug, a value is applied to that conversion (i.e., the money invested in the advertising channel).

After running the campaign for three months, you notice that advertising on mobile & in-app has brought in 15 free sample requests, sponsored ads in popular email newsletters have brought in 10 free sample requests, and social media advertising has brought in 1 free sample request.

Calculate the CPA for each advertising channel you utilize to optimize and determine the value each channel brings to your marketing efforts. The CPA is the total spend divided by the number of free sample requests.

Here, you can see that you are getting the most value from your advertisements placed on in-app and mobile and from sponsoring ads in popular newsletters. Consider reallocating your spending from social media advertising to mobile and in-app or email newsletters if you have a limited budget. Or, look at your social media ad to see if you need to improve the UX on your landing page, make your ad more understandable, or re-evaluate the audience receiving the message. Calculating the CPA helps you make these decisions.

At Adfire Health, we work with healthcare marketers to create optimized, highly effective, data-based digital engagement strategies. With Thumbprint™, our segmented data ecosystem of over 8.2 million healthcare professionals, we can offer direct access to healthcare professionals nationwide.

We bring our years of hands-on experience to every new campaign and work with you to get the best results possible. Contact us to learn more about what we can do for your business.