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Glossary

Cost per acquisition (CPA)

Cost per acquisition (CPA), also called cost per action, is ad spend divided by the number of conversions it brought, such as sales.

By Berend Vrakking, founder of Product Metrics. Updated 7 October 2026.

Formula

CPA = ad spend ÷ conversions

A conversion is whatever you count as an acquisition. For a shop that is usually a sale. Some platforms use CPA for cost per action, where the action can be a sign-up or an install: the formula is the same, only the conversion differs.

Example

A month with 40 sales
StepValue
Ad spend€2,000.00
Conversions (sales)40
CPA (€2,000.00 ÷ 40)€50.00
New customers among those sales25
CAC (€2,000.00 ÷ 25)€80.00

Each sale cost €50.00 in ads. Only 25 of the 40 sales came from new customers, so each new customer cost €80.00. Illustrative data.

For one product, and for an account

Per product, CPA is its ad cost divided by its own sales. That is the price of a sale, and a price on its own says nothing about whether the purchase was worth making. A CPA of €50.00 loses money on a product that earns €30.00 profit per sale, and earns a profit on one that earns €80.00.

So read each product’s CPA against its own profit per sale. An account-wide CPA target treats the €30.00 product and the €80.00 product as if they could afford the same sale. ROAS comes at it from the other side: revenue per euro of spend instead of cost per conversion.

Common mistake

Ranking products by CPA alone. The cheapest sale in the account is still a loss if the product earns less than it cost to sell.

Questions

What does CPA stand for in marketing?

CPA stands for cost per acquisition or cost per action. Both are ad spend divided by conversions. In shop advertising the conversion is usually a sale, so CPA is the ad cost of one sale.

How do you calculate cost per acquisition?

Divide ad spend by the number of conversions. €2,000.00 of ad spend that brought 40 sales is a CPA of €50.00. Use the same period and the same conversion for both numbers.

What is a good CPA?

One below the profit a sale earns before ad spend. That line sits in a different place for every product, so a shop-wide ‘good CPA’ is an average of very different limits.

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