What is CPA?
Cost per Acquisition (CPA), also called Cost per Action, is a central metric in performance marketing. It indicates how much a company spends on average to acquire a customer or conversion. The calculation: Total advertising costs / Number of conversions = CPA. Unlike CPC (cost per click), CPA considers the entire customer journey to conversion. A low CPA means more efficient marketing. The target CPA should be below Customer Lifetime Value (CLV) to be profitable. Google Ads offers "Target CPA bidding" as an automated bidding strategy.
Key Points
- Calculation: Advertising costs / Conversions = CPA
- CPA should be below customer lifetime value
- Different conversion types have different CPAs
- Target CPA bidding automates optimization
- Use industry benchmarks as guidance
- Micro-conversions have lower CPA than purchases
Practical Example
“With a CPA of €45 and an average order value of €2,000, we have a ROAS of 44:1.”