What is CPA?
CPA (Cost Per Acquisition) measures how much you spend to acquire one conversion. A conversion can be a purchase, lead, signup, download, or any other valuable action. CPA is crucial for understanding the profitability of your marketing campaigns.
CPA Formula
The CPA formula is:
CPA = Total Ad Spend / Total Conversions
CPA vs CAC: What's the Difference?
- CPA (Cost Per Acquisition): Cost per conversion action from a specific campaign or channel
- CAC (Customer Acquisition Cost): Total cost to acquire a new customer across all marketing efforts
What's a Good CPA?
A "good" CPA depends on your business model:
- E-commerce: CPA should be lower than your average profit margin per sale
- SaaS: CPA should be recoverable within 3-12 months of subscription revenue
- Lead Generation: CPA should align with the value of a qualified lead
How to Lower Your CPA
- Improve conversion rate optimization (CRO) on landing pages
- Refine audience targeting to reach high-intent users
- Use retargeting to convert warm audiences
- Test and optimize ad creative continuously
- Implement conversion value tracking for smart bidding
- Focus budget on best-performing campaigns