Metrics
CPA (Cost Per Acquisition)
Cost per acquisition is total ad spend divided by the number of conversions, giving the average cost to produce one defined outcome such as a sale, lead, or sign-up.
In practice
CPA is the metric lead-generation accounts live on and the target that Target CPA bidding optimizes toward. It is only as meaningful as the conversion action behind it: a low CPA on unfiltered form submissions can hide a very high cost per real customer.
We report CPA at several levels where the data allows: cost per lead, cost per qualified lead, and cost per customer, with the last two coming from CRM data through offline conversion import. Budget decisions are made on the deepest level available.
CPA also needs context from value. A high CPA on a service worth thousands is fine; a low CPA on a product with a thin margin is not. For e-commerce, CPA per order is a useful check alongside ROAS because it exposes campaigns that hit a ROAS target only by selling a few expensive items.
Why it matters
It is the number that says whether growth is affordable, provided it is measured against a real conversion.
RELATED TERMS
CPL (Cost Per Lead)
Cost per lead is ad spend divided by the number of leads generated, where a lead is a form submission, phone call, chat, or other inquiry that a sales process can follow up on.
Target CPA (tCPA)
Target CPA is a Smart Bidding strategy that sets bids to generate as many conversions as possible at or near an average cost per conversion you specify.
LTV (Customer Lifetime Value)
Customer lifetime value is the total revenue or profit a customer is expected to generate over the whole relationship, not just the first purchase.
Written by Ilya Bulychev, Founder, Live PPC Ads. Part of the PPC Glossary.
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