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Cost per Acquisition (CPA)

What is CPA and what is it used for?

Updated over a week ago

What is CPA?

CPA stands for Cost per Acquisition, which is a metric used in digital marketing to measure the cost of acquiring a new customer or lead.

Cost Per Acquisition (CPA) = Media Spending / Total Sales

It is calculated by dividing the cost of an ad (or Media Spending) by the number of sales coming from new customers acquired thanks to the ad. A lower CPA generally indicates that a campaign is more efficient in acquiring new customers or leads at a lower cost.

How do we compute CPA?

When a customer is acquired through an ad, it means this ad contributed either fully (by itself) or partially (along with other campaigns) to bringing the new customer in.

In the Media Activity and the Sales by Campaign dashboards, you might see for instance that a campaign contributed to 0.45 (or 45%) of the first order. However, when we compute the CPA, we consider this campaign brought 1 new customer (and not 0.45 new customers).

We compute the CPA like so:

number of new customers brought by the media during a given time period /
total media spending of this media in this period

If one customer is brought by more than one media, you will see, for this particular customer, a different CPA for each media that contributed to the sale. Indeed we can’t prove that, for instance, if media #2 was not part of the customer journey, this customer would have become one. So all media involved in the customer journey are considered.

To learn more about this, see our article on Attribution computing (coming soon).

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