CPA formula
CPA = Ad Spend ÷ Conversions Divide your total ad spend by the number of conversions it produced. $2,000 in spend that led to 100 conversions gives a CPA of $2,000 ÷ 100 = $20 — each conversion cost $20 to acquire.
CPA calculation in practice
A conversion can be a purchase, signup, form submission, or another defined action. Use the same conversion definition when comparing campaigns or time periods so the CPA figures are comparable. A lower CPA generally means more efficient spending, but it's most useful compared against what a conversion is actually worth to you, not treated as good or bad in isolation.
Frequently asked questions
What's a good CPA?
It depends entirely on what a conversion is worth to your business. A $20 CPA is excellent if each conversion brings in $200, and unsustainable if each one only brings in $15. CPA is most meaningful compared against your own margins or customer lifetime value, not a generic benchmark.
What's the difference between CPA and CAC?
CPA measures the cost of acquiring a conversion or taking a defined acquisition action, often using a specific marketing or advertising cost. CAC measures the broader cost of acquiring a new customer and can include advertising, sales, marketing, and other acquisition costs. In a simple setup where ad spend is the only acquisition cost and every conversion is a new customer, CPA and CAC can be the same.
Can CPA be calculated for leads instead of customers?
Yes. CPA can be calculated for any defined conversion or acquisition action. For example, if you spend $1,000 to generate 50 leads, your CPA for that lead conversion is $20. If you instead want the cost of acquiring a paying customer, use the number of customers as the conversion count or use a Customer Acquisition Cost calculation that includes the broader costs of acquiring customers.