Cost per acquisition (CPA) is the average amount you spend to generate one conversion from a marketing channel, where a conversion might be a sale, a signup, or a qualified lead. You calculate it by dividing the total cost of a campaign by the number of conversions it produced. CPA is narrower than customer acquisition cost (CAC), which rolls in every cost of winning a customer (sales salaries, tools, overhead) rather than just the spend tied to a specific channel or campaign.
How it works
The formula is straightforward: total channel spend divided by conversions. If you spend 2,000 on a paid search campaign and it produces 40 qualified leads, your CPA is 50 per lead. The definition of a conversion is yours to set. In direct-to-consumer, it is usually a completed purchase. In B2B, where the buying cycle is longer, a conversion is often an earlier action such as a submitted quote request or a booked call.
Why it matters
CPA tells you which channels pay for themselves and which do not. Compared against the value of what you win (average order value or the lifetime value of an account), it shows whether a channel is profitable. Tracking CPA over time also flags rising ad costs or a channel that has stopped converting before it drains the budget.
Example in B2B quoting
Say you run ads driving traffic to a product page with a Request a Quote button. If 100 clicks cost 400 and produce 20 quote requests, your CPA per request is 20. But a quote request is not revenue. To judge the channel properly, follow those requests through to accepted, paid quotes so you can compare CPA against closed value, not just top-of-funnel volume. That is where quote-level open, click, and conversion tracking earns its keep.
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