CPA (cost per acquisition)

CPA, or cost per acquisition, is the average amount you spend on advertising to generate one conversion. In ecommerce the conversion is usually a purchase, but CPA can be tracked for any action you define, such as a lead, a sign-up or an add-to-cart. Meta reports it as "cost per result", where the result is whatever the campaign is optimising for.

How to calculate it

CPA = ad spend ÷ number of conversions

Worked example (made-up numbers): an ad set spends $900 and generates 30 purchases. CPA = 900 ÷ 30 = $30 per purchase. Try your own numbers with the CPA calculator.

Target CPA versus actual CPA

Knowing your CPA is only half the job; you also need to know what you can afford to pay. A simple way to set a ceiling is to start from the margin on a typical order:

• If your AOV is $60 and your margin before ad spend is 50%, you have $30 to spend per order before you lose money. That $30 is your break-even CPA.
• If customers reliably buy again, you might accept a higher first-order CPA and rely on LTV to make it back.

CPA versus CAC

CPA and CAC are related but not identical. CPA counts every conversion, including repeat buyers, and usually only ad spend. CAC focuses on new customers and often includes wider acquisition costs such as agency fees, creative production and tools.