The difference
- CPA is ad spend divided by conversions (lead, signup, or purchase).
- CAC is total acquisition cost divided by new paying customers.
- CPA is tactical; CAC is unit economics and planning-grade.
Formulas
- CPA = ad spend / conversions.
- CAC = total acquisition costs / new paying customers.
When to use CPA
- Campaign-level optimization (ads platform performance).
- Early-funnel conversion events (lead, signup, purchase).
- Short-window iteration on creative, targeting, or landing pages.
When to use CAC
- Unit economics, payback, and growth planning.
- Comparing channels or segments with different funnel quality.
- Board or finance reporting (fully-loaded CAC).
How to translate CPA to CAC
- If CPA is for leads: CAC = CPA / lead-to-customer rate.
- Add sales costs if CPA only includes ad spend.
- If CPA is for purchases, it is closer to paid CAC but still excludes fully-loaded costs.
CAC vs CPA example
If CPA (lead) is $80 and lead-to-customer rate is 10%, CAC is $800. If you spent $50,000 and acquired 100 customers, CAC is $500.
Common mistakes
- Calling lead CPA "CAC" without converting leads to customers.
- Mixing paid-only CAC with fully-loaded CAC in the same report.
- Comparing CPA across campaigns with different conversion definitions.
- Ignoring churn and LTV when judging whether CAC is sustainable.