The amount of money spent on a marketing campaign divided by the number of acquisitions generated by that campaign. An acquisition can refer to any action that is valuable to the business, such as a purchase, registration, or lead.
CPA is a vital metric for evaluating the financial efficiency of marketing campaigns. By understanding and optimizing CPA, businesses can enhance their marketing strategies, ensure better allocation of resources, and ultimately achieve higher profitability.
Cost Per Acquisition (CPA) is a key metric in digital marketing and advertising that measures the cost associated with acquiring a customer or completing a specific desired action, such as a sale, signup, or download. It's a crucial metric for understanding the effectiveness and efficiency of marketing campaigns.
CPA = (Total Cost of Campaign) / Number of Acquisitions
Example: Suppose you run a digital advertising campaign with a budget of $5,000 and acquire 100 new customers as a result. The CPA would be:
CPA= 5000 / 100 = $50
This means it cost you $50 to acquire each new customer through this campaign.