Cost Per Acquisition (CPA) is the price you pay to get one conversion—a completed action you care about. In web analytics and performance marketing, “acquisition” can be a purchase, a qualified lead, a sign-up, or another defined goal. Think of CPA as the unit cost of growth: if you know what one conversion costs, you can decide whether to scale, pause, or fix your funnel.
Formula (short and sweet):
CPA = Total Campaign Cost ÷ Number of Acquisitions
Where “acquisition” must be tracked consistently via events/goals and tied to a clear Conversion Rate definition.
Why CPA matters
- Puts spend and outcomes on the same axis.
- Plays nicely with User Lifetime Value (LTV) to judge profitability (LTV > CPA = healthy).
- Highlights channel efficiency, especially when combined with Attribution Model or Multi-Touch Attribution.
What counts as an “acquisition”?
- Purchase (e-commerce)
- Marketing Qualified Lead (B2B)
- Trial sign-up or subscription start
Define it once in your tracking plan and keep it consistent across channels. Use UTM Parameters to keep sources clean, and verify events feed into your goal framework.
Mini example
You run two paid campaigns for a SaaS free trial:
| Campaign | Spend | Sign-ups (Acquisitions) | CPA |
|---|---|---|---|
| Search | $2,400 | 120 | $20.00 |
| Social | $1,800 | 60 | $30.00 |
Outcome: Search is more cost-efficient (lower CPA). But check downstream quality: if Social sign-ups convert to revenue better (see Revenue and Average Order Value (AOV)), a higher CPA might still be justified.
Practical tips
- Anchor CPA to a single conversion definition; don’t mix purchases and leads.
- Pair CPA with Click-Through Rate (CTR) and on-site Conversion Rate to locate bottlenecks (ad, landing page, or product).
- Watch attribution bias: last-click CPA often underrates upper-funnel channels; review model impact before cutting spend.
- Segment CPA by campaign, creative, audience, and device to spot outliers quickly.
Bottom line: CPA tells you the cost to make value happen. Make it consistent, connect it to LTV, and use it as a throttle for scaling what truly works.