💵 If you’re running digital marketing campaigns, knowing your Cost Per Acquisition (CPA) is important. It tells you how much you’re spending to get a customer — and whether your campaigns are profitable.
In this article, we’ll break down what CPA is, how to calculate it, and give you an easy-to-use CPA calculator.
Table of Contents
🙋♀️ What Is CPA?
CPA (Cost Per Acquisition) is a marketing metric that shows how much it costs to acquire one customer, lead, or conversion. It helps you understand how efficiently your ad budget is being used.
CPA is commonly used in:
- Paid ads (Google, Facebook, Instagram, etc.)
- Affiliate marketing
- Influencer campaigns
- Email funnels
🧮 CPA Formula
The formula is straightforward:
CPA = Total Marketing Cost / Number of ConversionsWhere:
- Total Marketing Cost = the amount spent on advertising or promotion
- Number of Conversions = total leads, signups, or purchases generated
📈 Example Calculation
Let’s say:
- You spent $1,200 on a campaign
- It resulted in 60 sales
CPA = $1,200 / 60 = $20That means each customer cost you $20 to acquire.
🚨 Why CPA Matters
CPA helps answer important business questions:
- Is this ad campaign profitable?
- Should I scale up or pause the campaign?
- How does CPA compare across different marketing channels?
If your CPA is higher than your profit per customer, you’re losing money.
💡 Final Thoughts
Knowing your Cost Per Acquisition can make or break your ad campaigns. Keep it lower than your customer value, and you’ll scale profitably. Monitor it regularly, test variations, and use the calculator above to stay on top of your metrics.