Cost Per Acquisition / Advertising Terms Cost Per Acquisition Cost per acquisition, or CPA, is a key digital marketing metric that measures how much it costs to acquire a customer, lead or conversion through a specific campaign or channel. It is calculated by dividing the total cost of a marketing effort by the number of successful acquisitions. These acquisitions could be purchases, form submissions, donations, sign-ups or any other predefined goal. CPA is used across paid search, social media, affiliate marketing and display advertising to evaluate efficiency and return on investment. For example, if you spend $1,000 on a paid campaign and generate 50 new customer sign-ups, your CPA is $20. Lower CPA means you are acquiring conversions more efficiently, which allows for better use of budget and higher margins. CPA can be set as a target in bidding strategies on platforms like Google Ads, where automated bidding tools help maintain or improve performance while staying within budget. It is often compared alongside other metrics such as cost per click (CPC) and return on ad spend (ROAS) to build a fuller picture of marketing success. Managing CPA effectively involves continuous optimisation. Strategies include improving ad relevance, tightening audience targeting, optimising landing pages, and testing calls to action or creative formats. For nonprofits, lowering CPA might mean acquiring more donors or volunteers without increasing spend. For B2B companies, it could reflect more qualified leads entering the funnel at a sustainable cost. Understanding CPA helps marketers allocate resources more effectively and measure what works in real, financial terms.