---
title: "Cost per acquisition (CPA): formula | Product Metrics"
description: "Cost per acquisition (CPA), also called cost per action, is ad spend divided by conversions. Formula, example, and where CPA parts ways with CAC and ROAS."
canonical: "https://www.productmetrics.io/glossary/cost-per-acquisition"
pageType: article
language: en
publisher: "Product Metrics"
author: "Berend Vrakking"
datePublished: 2026-10-07
dateModified: 2026-10-07
---

> Content index: https://www.productmetrics.io/llms.txt

# 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.

## 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:

| Step | Value |
| --- | --- |
| Ad spend | €2,000.00 |
| Conversions (sales) | 40 |
| CPA (€2,000.00 ÷ 40) | €50.00 |
| New customers among those sales | 25 |
| 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.

## Keep reading

- [Customer acquisition cost (CAC)](https://www.productmetrics.io/glossary/cac): Cost per new customer, not per sale.
- [Return on ad spend (ROAS)](https://www.productmetrics.io/glossary/roas): Revenue per euro spent, where CPA is cost per conversion.
- [Customer acquisition cost for ecommerce](https://www.productmetrics.io/blog/customer-acquisition-cost-formula): The formula, and why CAC and CPA differ.
- [Break-even ROAS calculator](https://www.productmetrics.io/break-even-roas-calculator): Find the return each product needs to break even.
- [Set a target ROAS from your margin](https://www.productmetrics.io/blog/target-roas-from-margin): Target CPA and target ROAS, worked out from what a product earns.
- [Google Ads budget calculator](https://www.productmetrics.io/google-ads-budget-calculator): See the maximum cost per click your margin allows.

---

Written by Berend Vrakking, founder of Product Metrics. Last updated 2026-10-07.

HTML version: https://www.productmetrics.io/glossary/cost-per-acquisition