Cost Per Acquisition (CPA)

The total cost of acquiring one paying customer through a specific campaign or channel.

What is Cost Per Acquisition?

Cost Per Acquisition (CPA), also known as Cost Per Action, measures how much you spend to acquire one customer or lead. It’s a critical metric for understanding the efficiency of your marketing spend.

CPA Formula

CPA = Total Campaign Cost / Number of Acquisitions

If you spend $1,000 on ads and get 25 new customers, your CPA is $40.

CPA vs. Other Metrics

CPA vs. CPL: CPA typically refers to paying customers, while CPL (Cost Per Lead) includes all leads
CPA vs. CAC: CAC (Customer Acquisition Cost) includes all marketing and sales expenses, not just specific campaigns

Managing CPA

Your target CPA should be less than your customer lifetime value (LTV) to ensure profitability. Use conversion tracking to measure CPA across channels and optimize spend toward the most efficient sources.

MORE PAID ADVERTISING TERMS

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Cost Per Click (CPC)

The amount an advertiser pays each time a user clicks on their ad.

Pay-Per-Click (PPC)

An advertising model where advertisers pay a fee each time their ad is clicked, buying visits rather than earning them organically.

Quality Score

Google Ads metric that measures the quality and relevance of your keywords, ads, and landing pages on a 1-10 scale.

Remarketing

A strategy that shows targeted ads to people who have previously visited your website or used your app.

Return on Ad Spend (ROAS)

A marketing metric that measures the revenue generated for every dollar spent on advertising.

Search Engine Marketing (SEM)

A form of digital marketing that promotes websites by increasing visibility in search engine results through paid advertising.

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