Cost per acquisition (CPA)
Cost per acquisition (CPA) is ad spend divided by the number of conversions, where a conversion is whatever action you defined: a purchase, a sign-up, a lead. It answers what one result costs. A useful target CPA comes from your own economics, such as margin per order or customer value, not from industry averages.
Updated
Formula and example
CPA = spend ÷ conversions.
Example: $2,000 spent producing 50 purchases is a CPA of $40.
Setting a target CPA
- Decide what the conversion is worth. For a one-off purchase, start from gross margin per order. For subscriptions, start from expected margin over the customer's life.
- Decide how much of that value you are willing to spend to acquire it. Spending all of it means advertising at break-even.
- The result is your maximum CPA. Ads above it lose money on the conversion they report; ads well below it can usually take more budget.
CPA versus CAC
CPA is measured per campaign or ad from the platform's reported conversions. Customer acquisition cost (CAC) is usually calculated across the business, including all marketing and sales spend divided by new customers. CPA is the tool for comparing ads; CAC is the tool for judging whether growth is affordable.
Why reported CPA can drift from reality
Platform-reported conversions depend on the attribution window and on tracking quality. A seven-day click window will report more conversions, and so a lower CPA, than a one-day window. Keep the setting constant when comparing, and reconcile against your own sales data.
How the platforms define it
Google Ads offers Target CPA, an automated bid strategy that aims for as many conversions as possible at the average cost you set. Google notes that some conversions may cost more than the target and some less, so judge it on the average over time, not single days.
Questions
- What is the difference between CPA and CPL?
- CPL, cost per lead, is a CPA where the action is a lead. CPA is the general term for any defined conversion.
- How do I lower my CPA with creative?
- Raise the share of impressions that become qualified clicks: stronger hooks, clearer offers, and ads that are specific about who the product is for, so the clicks convert.
Sources
Read on 27 October 2026. Platforms change specs and policies without notice; check the source before you build to a number.