Cost per Acquisition

Cost per acquisition (CPA) is the average cost of producing one conversion, a measure of a channel's cost efficiency against the conversions it brought.

CPA and customer acquisition cost are often confused, but their denominators differ and that difference matters: customer acquisition cost divides by new customers, while CPA divides by conversions, which may be a lead, a signup or any defined action, not necessarily a paying customer. So CPA is a cost metric tied to the definition of a conversion and meaningless without it. Like any cost metric it has two halves from two sources: the conversion count from the analytics tool, and the spend from the ad panel. The common trap is comparing the CPA of channels whose conversions are not the same kind; the CPA of a channel bringing cold leads is not comparable to one bringing purchases, even if the numbers are close. CPA speaks only when read beside the value of that same conversion.