CPA
DefinitionCPA (cost per action, also called cost per acquisition) is your ad spend divided by the number of conversions. It tells you what you pay, on average, for one purchase, enquiry or sign-up.
How it works
A conversion is whatever action you set as the goal: a purchase, a submitted form, a phone call. CPA should always be calculated for one type of conversion at a time. If a campaign counts purchases and newsletter sign-ups together, the blended CPA looks low and tells you very little. Google Ads and Meta Ads both let you set a target CPA, and the system adjusts bids on its own to hit it. The more conversions a campaign collects each month, the better this works.
- Ad spend
- €3,000
- ÷Enquiries
- 45
- =CPA
- approx. €67
Figures are illustrative.
What it means for you
CPA only means something next to what a customer is worth to you. If one in three of the enquiries above turns into a job, winning a customer costs about €200. On a job with a €1,500 margin, that’s a good result. On a €150 margin, you lose money on every customer.
From our accounts
A brand campaign, the one targeting searches for your company name, usually has the lowest CPA in the account and pulls the account average down. Some of those people were already looking for you and would have bought without the ad. We report that campaign’s CPA separately, so it doesn’t hide how the rest are doing.
In your Google Ads account, we agree with you what a good cost per acquisition looks like and set bids to match.
Google Ads