Term · Marketing & analytics
CPA (cost per acquisition)
CPA — cost per acquisition (or cost per action) — is the average advertising cost of one desired action: an enquiry, a qualified lead, a purchase, a booking.
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Explained
CPA = advertising cost ÷ number of actions
Define the action carefully
The same campaign can have very different CPAs depending on what counts:
- cost per form submission;
- cost per qualified lead;
- cost per sale.
Optimising for the cheapest action — form fills — often attracts low-quality leads. Measuring cost per qualified lead or per sale reveals which campaigns really work. See lead quality feedback loop.
CPA and CAC
CPA usually refers to advertising cost for a specific action; CAC — customer acquisition cost — includes all costs of acquiring a new customer, such as sales time and tools. Both are useful at different levels.
Using CPA to manage budgets
- Set a target CPA from what a customer is worth and your margins. See CAC and LTV.
- Compare CPA by channel, campaign and audience.
- Use target CPA bidding in ad platforms once conversion data is reliable.
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FAQ
Frequently asked questions
Is a lower CPA always better?
Only if the quality of what you acquire stays the same. Cheaper leads that never buy raise your real cost per customer.
How much data is needed for target CPA bidding?
Platforms recommend a minimum number of conversions per campaign; check current guidance.