CPA

What does CPA mean?

CPA, or cost-per-acquisition, is used to refer to the average cost a business incurs to acquire each new client, customer, sale or lead.

To find your CPA, take the total cost of your advertising expenditure and divide it by the total number of new sales or leads you “acquired.”

Example:

If you spent $5000 on advertising to generate 50 new leads, you would say that your CPA was $100.

Measuring and evaluating your CPA is key when undertaking online or digital marketing activities such as SEO or Google AdWords advertising. When planning for an upcoming online marketing campaign, always set a realistic target CPA that allows your business to profit at a comfortable level.

If you assess realistic conversion rates and estimated advertising costs and come to the conclusion that your CPA will likely be higher than your product margin, you should consider an alternative strategy.