What is CPA (Cost Per Acquisition)?

CPA (Cost Per Acquisition) is a digital marketing metric that measures how much it costs to acquire one paying customer or desired conversion, such as a sale, signup, or download.

It’s commonly used in performance marketing to evaluate the effectiveness and profitability of advertising campaigns. The formula is simple: divide total ad spend by the number of conversions.

CPA helps businesses understand whether their ad spend is generating a positive return on investment (ROI) and how efficiently they are acquiring new customers.

Example

"Our average CPA on Google Ads was $12, meaning we spent $12 to get each customer who made a purchase."

How is CPA used in business?

In business, CPA is a key performance indicator (KPI) for marketers, especially in eCommerce, SaaS, and subscription-based businesses. A lower CPA generally means better ad efficiency and higher profit margins.

CPA is often used to compare different channels (e.g., Meta Ads vs. Google Ads), creatives, or audiences. It's also central to optimizing campaigns through A/B testing, budget allocation, and funnel improvements.

Unlike CPC (Cost Per Click), which only measures traffic, CPA tracks the ultimate goal - conversion.

Pro Tip

Track CPA across the full customer journey, not just the ad platform. Use attribution tools to make sure you're measuring real acquisition, not just clicks or signups.