Definition
CPA (Cost Per Acquisition)
CPA, or cost per acquisition, is the average amount you spend on advertising to get one conversion, such as a sale, booking or lead, calculated as ad spend divided by conversions.
CPA connects ad spend to the outcome you care about. If the conversion is a lead, CPA and cost per lead are the same; if it's a purchase, CPA is your cost per sale.
A target CPA should come from your numbers: how much a customer is worth and what margin you need. Google Ads and Microsoft Ads can bid automatically towards a target CPA once there's enough conversion data.
CPA in practice
An online course spends $3,000 on ads and gets 60 enrolments, a CPA of $50. Each enrolment is worth $200 in profit, so the campaign is profitable and the budget can be increased.
Related terms
Common questions about CPA
How do you calculate CPA?
Divide ad spend by the number of conversions. $2,000 spent for 40 conversions is a CPA of $50.
What's the difference between CPA and CAC?
CPA usually covers ad spend per conversion. CAC includes all the costs of winning a customer, such as sales time and tools.
What is a good CPA?
One that leaves a profit after the value of the customer and your margins are taken into account. It varies widely by industry.
What is Target CPA bidding?
An automated bid strategy in Google Ads and Microsoft Ads that tries to get as many conversions as possible at or below your target CPA.
