Smart CPA Goals: How to Set High-Level Targets

Smart CPA Goals: How to Set High-Level Targets

Hiring top talent in today’s competitive market requires a multi-level approach – one that takes into account both small details and big-picture targets. This is especially true for setting recruitment budgets and all the targets that require cost optimization.

The best recruitment marketers know exactly where their hiring budget is going and why. With the sheer amount of tools and data available today, recruitment marketers can tailor their hiring campaigns in ways they never could before. This spells good news for optimizing all the various stages the application funnel to end up with the most cost-efficient strategy overall.

Hiring teams must be both thorough and agile with how they measure the success of any campaign. One effective way to do this is to shape smart bidding campaigns around high-level metrics to ensure the long-term value of hiring efforts.

Pricing matters

Selecting the right campaign pricing model – and setting realistic targets – is an important step in developing a successful hiring campaign. Varying pricing models exist for recruitment markets, allowing for customization and budget flexibility based on the setup of a given hiring process.

Recruitment marketers who manage campaigns themselves will likely find Cost per Click (CPC) – the price paid for each click on an ad – to be an ideal model. Using a carefully planned smart bidding strategy, hiring teams can optimize their campaigns with a clear idea of per-click lead costs in each part of the application funnel.

Smart Bidding: How Programmatic CPC Modeling Can Increase Recruitment Success
Smart Bidding: How Programmatic CPC Modeling Can Increase Recruitment Success

Despite this, CPC only goes so far. The ultimate aim for a recruitment marketer is to ensure that the right amount of people get hired at an optimal cost – a goal that’s commonly managed by Cost Per Applicant/Acquisition (CPA).

Teams that work with Demand-Side Platforms (DSPs) can easily move towards a CPA goal using the platform’s customization, automation and analytics options. DSPs usher in greater campaign flexibility and increased probability for recruitment success.

But before getting more into platforms that drive CPA optimizations, let’s looks at the basics. How is CPA actually calculated?

Calculating the CPA sweet spot

High-level recruitment targets such as CPA should be the driving factors for campaign success. CPA can be derived in two different ways, using other important metrics including effective Cost Per Hire (eCPH) and CPC.

Calculating top-down CPA means examining the conversion rate from application to actual hire (eCPH). For example, if 10 applicants produce 1 hire and the total campaign cost is $500, then CPA is $50.

Bottom-up CPA calculation measures the number of applicants that come from a certain amount of clicks. An example is if CPC is set at $0.80, and 50 clicks produces 1 applicant, then CPA amounts to $40.

With these varying ways of calculating CPA, it’s especially important for recruiters to know the implications of the metric. Typically, the true CPA lies somewhere in the middle of both methods.

Smart bidding and CPA targets

When it comes to developing a smart bidding campaign using a CPA target, recruitment marketers can choose to set their goals based on several factors: cost, volume or blended.

Cost-based goal setting involves setting a maximum spend for campaigns, whereas volume-based emphasizes the number of conversions with an assumption of varying costs. Blended goal setting is some combination of the two.

CPA targets fall under the cost approach and give recruiters a specific goal to optimize towards in the media buying process. Every piece of media purchased should fit within the constraints of the CPA goal.

For example:  Let’s say a recruiter sets CPA at both $1 and $100 in a market where the average CPA is $50. Typically, he gets 50 clicks per applicant. The result is that the $1 CPA leads to a $0.02 CPC, which is below CPC floors in most job boards and prevents him from having inventory at all. Having a low bid also de-prioritizes job ad listings, resulting in lower quality applicants clicking and applying.

On the other hand, the $100 CPA leads to a $2.00 CPC, which is overpaying by 100%. This is due to an absence of a 2nd price auction. The bidder may already have the top slot without knowing it.

In one of the above scenarios, the recruiter gets no applicant at all; in the other, he overpays for it. It’s important, then, to hit the CPA sweet spot. This is the the zone that, simply by the way it’s set, transforms the campaign into a more traditional auction: the more money a recruiter is willing to pay per application, the more applications he will get.

Smart CPA Goals: How to Set High-Level Targets
Smart CPA Goals: How to Set High-Level Targets

Calculations to find this point can be done manually, but the right DSP can take the guesswork and time out of the process, ensuring the optimal target is set. DSPs can also ‘backtrack’ all bids into a pre-calculated, effective CPA.

Bottomline: CPA is a helpful model for setting realistic hiring goals and measuring their effectiveness.

Recruiting campaigns today require close examination of data from various sources in the application funnel in order to arrive at cost-effective targets. Tracking high-level metrics such as LTV, eCPH, and from those, CPA, can be a make-or-break factor for successful hiring strategies over time.

Utilizing CPA doesn’t have to be time-consuming or challenging. DSPs facilitate this process by calculating, analyzing and optimizing for the best possible value. With a platform in place, companies not only get real-time campaign improvements, but also a holistic view on their recruitment efforts.

The key to making the right hires in today’s landscape is all in the data. Knowing this, smart companies can use high-level targets such as CPA to guide their decision-making.


Perengo is a programmatic recruitment platform.

High-growth businesses and Fortune 1000 companies use Perengo DSP to solve their recruitment challenges at scale. The platform provides tools for recruitment automation and business intelligence.

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