What is CPA (cost per acquisition) in marketing?
Quick answer
CPA, or cost per acquisition (also cost per action), is what an advertising campaign spent for each conversion it produced, such as a sale, a sign-up or a booked call. It is campaign spend divided by conversions: $3,000 for 60 sign-ups is a CPA of $50.
Last updated
Updated · By Robert Breen
Why it matters
CPA turns a campaign into a price tag. Clicks and impressions describe attention; CPA tells you what a result cost, which you can compare directly with what that result is worth to the business.
It is also the number most ad platforms can optimize for. Google Ads and Meta can bid automatically toward a target CPA you set, so getting the conversion tracking and the target right decides how well the automation spends your money.
A worked example
An online course company sells a $199 course. Its Meta campaign spends $4,200 in a month and gets 70 purchases, a CPA of $4,200 / 70 = $60. Its Google search campaign spends $2,700 for 54 purchases, a CPA of $50.
Each sale has about $15 of payment and delivery cost, so the most the company can pay per sale and still break even is $184. Both channels are well inside that. The team sets a target CPA of $70 in both platforms and lets automated bidding find more sales up to that price.
Often confused with
CPA vs CAC
Customer acquisition cost usually includes all sales and marketing costs (salaries, tools, ads) divided by new customers. CPA usually covers ad spend for one campaign or channel. CAC is the company view; CPA is the campaign view.
CPA vs CPC
CPC is the price of one click. CPA is the price of one result, and equals CPC divided by conversion rate.
Acquisition vs action
Some platforms say "cost per action", where the action can be a lead or sign-up rather than a sale. Always check what conversion the CPA is counting.
Tips
- Work out your maximum affordable CPA from margin before you launch.
- Compare CPA for the same conversion type only; a lead is not a sale.
- Let automated bidding run for a couple of weeks before judging it.
Related terms
Learn it in a free lesson
- The Marketing Funnel Explained, With a Worked Example (about 9 minutes)
- PPC Metrics Explained: CPC, CTR, CPA and ROAS With Examples (about 11 minutes)
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Related in the AI glossary
Frequently asked questions
- How do you calculate CPA?
- Divide ad spend by the number of conversions. $2,500 / 50 leads = $50 CPA.
- What is a good CPA?
- One comfortably below what a conversion is worth to you. Work it out from your margin or your lead-to-customer rate rather than an industry average.
- What is target CPA bidding?
- An automated bid strategy in Google Ads and similar platforms that sets bids to get as many conversions as possible at or below the average cost you choose.
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