What is Cost Per Acquisition?
TL;DR
The total cost to acquire one customer or lead through advertising. CPA = Total Ad Spend ÷ Number of Conversions. CPA is more meaningful than Cost Per Click because clicks don't matter if they don't convert. Compare your CPA to Lifetime Value to ensure advertising profitability.
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Frequently Asked Questions About Cost Per Acquisition
What's a good CPA for my business?
Your acceptable CPA depends on your profit margins and customer lifetime value. If a customer is worth $500 over their lifetime, you might accept $100 CPA. If they're worth $50, you need CPA under $50. Calculate based on YOUR numbers, not industry averages.
How do I calculate CPA?
CPA = Total Ad Spend ÷ Number of Conversions. If you spent $1,000 and got 20 leads, your CPA is $50. Track conversions accurately, use proper conversion tracking in Google Ads and analytics.
Why is my CPA so high?
High CPA comes from: expensive keywords (high CPC), low conversion rates (landing page issues), wrong audience targeting, poor ad relevance, or weak offers. Diagnose which factor is the problem, then fix it systematically.
Should I use CPA bidding in Google Ads?
Target CPA bidding can work well once you have conversion data (Google recommends 30+ conversions). It automates bid optimization. But start with manual bidding to understand your baseline, then test automated strategies.
How does CPA relate to ROI?
CPA tells you cost to acquire a customer. ROI requires knowing what that customer is worth. If CPA is $100 and customer lifetime value is $500, your ROI is 400%. CPA without context is meaningless, always compare to customer value.
Terms Related to Cost Per Acquisition
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