The CPA Formula
Cost per acquisition is what you pay, on average, for each conversion.
CPA = total campaign cost ÷ number of conversions
Spend $5,000 and get 50 sales, and your CPA is $100. The maths is simple. Getting the inputs right is where most CPA numbers go wrong.
A Second Way to See It
CPA also equals cost per click divided by conversion rate. That shows you the two levers you can pull.
| Cost per click | Conversion rate | CPA |
|---|---|---|
| $2.00 | 2% | $100 |
| $2.00 | 4% | $50 |
| $1.00 | 2% | $50 |
Doubling your conversion rate does as much for CPA as halving your click costs, and it's often easier.
CPA vs CAC vs CPL
| Metric | Formula | Use it for |
|---|---|---|
| CPA | Campaign cost ÷ conversions | Comparing campaigns and channels |
| CPL | Campaign cost ÷ leads | Lead generation |
| CAC | All sales and marketing costs ÷ new customers | Overall business profitability |
Setting a Target CPA
- Find gross profit per salePrice minus product costs, fees and fulfilment.
- That's your break-even CPAAbove it, each sale loses money on the first order.
- Adjust for repeat valueIf customers reliably buy again, you can afford more. See lifetime value tracking.
- Set the target below break-evenLeave room for profit and reporting error.
Illustrative: a $120 product with $40 of costs has $80 gross profit, so break-even CPA is $80. A $60 target leaves $20 profit per first sale.
Common Mistakes
- Mixing conversion types, such as leads and sales, in one CPA.
- Using each platform's own count, which double-counts sales several platforms claim.
- Judging too early. If buyers take a week, a two-day CPA is meaningless.
- Ignoring refunds, which make CPA look better than it is.
- Chasing the lowest CPA when cheaper customers are worth less.
CPA and ROAS Together
CPA tells you what each customer costs; ROAS tells you what each dollar returns. Use CPA when every sale is worth about the same, and ROAS when order values vary.
Getting Reliable CPA Numbers
CPA is only as good as your conversion count. ClickMagick counts conversions once across all channels with first-party tracking, syncs ad costs, and shows cost per conversion by campaign, ad and keyword, so you aren't adding up each platform's overlapping claims. See ClickMagick reports.
See your real cost per sale for every ad.
Try ClickMagick FreeFrequently Asked Questions
What is the CPA formula?
CPA equals your total campaign cost divided by the number of conversions over the same period. If you spend $5,000 and get 50 sales, your CPA is $100.
What's the difference between CPA and CAC?
CPA usually measures ad cost per conversion for a campaign or channel. CAC includes all sales and marketing costs, such as salaries, tools and agencies, divided by new customers.
What's the difference between CPA and CPL?
CPL is cost per lead, where the conversion is an enquiry or sign-up. CPA is often used for paying customers, though the formula is the same.
What is a good CPA?
One that leaves profit. Your break-even CPA is the gross profit per customer; your target should sit below it, or below a share of lifetime value if repeat purchases are reliable.
Why does my CPA look different in each ad platform?
Each platform counts conversions with its own attribution window and can't see conversions it missed. An independent tracker gives one consistent count across channels.