Cost Per Acquisition.

Cost Per Acquisition (CPA), also called Cost Per Action or Cost Per Conversion, is the average amount of marketing spend required to generate one customer or conversion. CPA = total marketing cost ÷ number of acquisitions. It is the primary efficiency metric for direct response marketing campaigns and one of the most important unit economics inputs for evaluating marketing ROI.

CPA Calculation Variants

Total CPA: all marketing spend ÷ total new customers — a full-funnel view. Channel CPA: a specific channel's spend ÷ that channel's conversions — compares channel efficiency. Blended CPA: total spend across all channels ÷ total conversions — accounts for cross-channel influence. Target CPA (tCPA): a Google Ads Smart Bidding strategy where Google automatically bids to achieve a specified CPA target.

CPA vs. CAC

CPA measures cost per conversion event (which might be a form fill, free trial start, or app download). CAC (Customer Acquisition Cost) specifically measures cost per paying customer, often including sales and onboarding costs beyond media spend. For direct e-commerce, CPA ≈ CAC. For SaaS with a free trial, CPA is the cost per trial sign-up; CAC is the cost per paid conversion from trial.

LTV:CPA Ratio

Evaluating CPA in isolation is insufficient — a $200 CPA is excellent for a $2,000 LTV customer and disastrous for a $150 LTV customer. The LTV:CPA ratio (analogous to LTV:CAC) determines whether acquisition economics are sustainable. A ratio above 3:1 is generally healthy; below 1:1 means the business is acquiring customers at a loss it cannot recover.