CPA (Cost Per Acquisition)
The average cost spent on advertising to acquire one customer or conversion.
Full definition
CPA (Cost Per Acquisition, also called Cost Per Action or Cost Per Conversion) measures how much you spend to achieve one desired outcome — a purchase, sign-up, demo request, or any defined conversion. It is calculated as: Total Ad Spend ÷ Number of Conversions. Target CPA (tCPA) is also a Google Ads smart bidding strategy where the algorithm automatically sets bids to achieve your target cost per conversion. CPA benchmarks vary significantly by industry: legal services can see CPAs of £150–£400+ while e-commerce might target £10–£50. A healthy CPA is one that maintains a positive margin relative to the lifetime value of the customer acquired.
Real-world example
An online course platform spends £4,200 on Google Ads and generates 60 course purchases. Their CPA is £70. Since each course sells for £297, the return is positive.
Related terms
A metric measuring revenue generated for every pound or dollar spent on advertising.
Read definitionThe amount an advertiser pays each time a user clicks on their ad.
Read definitionThe cost of 1,000 ad impressions, used as the pricing model for display and social media advertising.
Read definitionThe percentage of visitors who complete a desired action — a purchase, sign-up, form fill — out of total visitors.
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