Definition
CPA is ad spend divided by conversions (purchase, signup, lead). It's a tactical metric; CAC usually refers to cost per new paying customer including broader costs.
Formula
CPA = ad spend / conversions
Common mistakes
- Calling lead CPA 'CAC' (different denominators).
- Comparing CPA across campaigns with different conversion definitions.
- Ignoring downstream quality (refunds, churn, LTV).
Why this matters
This term matters because it affects how you interpret performance and make budget decisions. If you use inconsistent definitions or windows, ROAS/CPA can look "better" while profit gets worse.
Practical checklist
- Write a 1-line definition for "CPA (Cost Per Acquisition)" that your team will use consistently.
- Keep the time window consistent (weekly/monthly/quarterly) when comparing trends.
- Segment results (channel/plan/cohort) before drawing big conclusions from blended averages.
- Use a calculator that references this term (e.g., Target CPA from LTV Calculator) to sanity-check assumptions.
- Read the related guide (e.g., CAC vs CPA: definitions, formulas, and when to use each) for context and common pitfalls.
Where to use this on MetricKit
Calculators
- Target CPA from LTV Calculator: Translate LTV and contribution margin into a target CPA (and break-even CPA) for paid acquisition.
- Paid Ads Funnel Calculator: Model CPM -> CTR -> CVR to estimate CPC, CPA, ROAS, and profit per 1,000 impressions (with margin and variable costs).
- Marginal ROAS Calculator: Estimate diminishing returns and find the profit-maximizing ad spend from a simple response curve.
- Max CPC Calculator: Compute break-even and target CPC (and optional CPM) from CVR, AOV, and contribution margin assumptions.
- CPL to CAC Calculator: Convert cost per lead (CPL) into CAC using lead-to-customer rate (and compute targets).
Guides
- CAC vs CPA: definitions, formulas, and when to use each: CAC vs CPA explained: what each metric measures, how to calculate them, and how to translate CPA into CAC for planning.
- Target CPA: how to set acquisition targets from LTV and margin: A practical guide to target CPA: connect acquisition cost to LTV, contribution margin, and payback constraints (and avoid common mismatches).
- Paid ads funnel: CPM, CTR, CVR -> CPC, CPA, ROAS (with profit): A practical guide to the paid ads funnel: how CPM, CTR, and CVR drive CPC, CPA, ROAS, and profit - with formulas and common pitfalls.
- CTR (Click-Through Rate): definition, formula, and how to improve: CTR explained: what click-through rate is, how to calculate it, and how to improve CTR without sacrificing conversion quality.
- CVR (Conversion Rate): definition, formula, and how to calculate: CVR explained: what conversion rate means, how to calculate it correctly, and how to improve it without sacrificing scale.