What is CPA (cost per acquisition)?

CPA (cost per acquisition) is ad costs divided by the number of conversions. It shows what you pay on average for one purchase, quote request or other desired action. In Google Ads you see this as cost per conversion. You do not pay per conversion: you calculate these costs afterwards.

Why is CPA important?

Return per action: you see what a new customer or lead costs you.
A yardstick for viability: you set the cost against what a conversion earns you.
Basis for Smart Bidding: a target CPA steers bidding toward this number.

Examples of CPA

€1,000 in ad costs and 20 quote requests gives a CPA of €50.
A store earns €30 margin per order and has a CPA of €45: on the first order that is a loss.
A B2B software company pays €120 per demo request and also looks at the cost per actual customer.

How do you use CPA?

First decide what a conversion may cost you at most, based on margin or customer value. Then follow the CPA per campaign and keyword, and adjust with negative keywords, better landing pages or a target CPA. Only measure conversions that matter, or the CPA will be wrong. Need help with tracking? See analytics and dashboards.

CPA (Cost per Acquisition)