Cost Per Acquisition (CPA) refers to the total cost of acquiring a new customer through a specific marketing campaign or channel, encompassing all campaign costs divided by the number of new customers acquired.
To calculate CPA, divide the total cost of a marketing campaign by the number of customers acquired from that campaign.
CPA = Total Marketing Costs / Number of Acquisitions
CPA = Total Marketing Costs / Number of Acquisitions
If a campaign costs $5,000 and results in 50 new customers, the CPA would be $100 per acquisition.
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A 'good' CPA is one that reflects a cost-effective strategy for acquiring customers, tailored to the financial goals and industry standards of the business. Lower CPAs generally indicate higher efficiency.
A CPA that significantly exceeds industry averages or surpasses customer lifetime value suggests inefficiency, potentially draining resources and diminishing ROI.
Enhance targeting to improve ad relevance and increase conversion rates, effectively lowering your CPA.
Simplify the conversion process to minimize barriers, enhancing user experience and boosting conversion efficiency.
Continuously analyze campaign performance and make necessary adjustments to optimize spending and reduce CPA.
