CPA is short for Cost per action or cost per Acquisition. CPA tells you how much you have spent to achieve one goal (lead/conversion/sale) for your business.
For example, if you want someone to buy a product or buy your services. The CPA tells you how much money you spend in ads for this action to happen. Google Ads lets you optimize your campaigns based on CPA.
Below is my calculator which tells you the CPA of your ads using the number of conversions and total cost.
Cost Per Action Formula
The formula for calculating CPA is very easy. Cost per action is calculated by dividing the total cost by the number of actions/acquisitions completed. For example, if your ad spend was 200$ and by spending this budget 20 actions were completed. The CPA in this situation will be 200 divided by 20 which is equal to 10.
Frequently Asked Questions(FAQ)
Where CPA (Cost Per Action) is mostly used?
There are a lot of ad platforms that have CPA strategies you can use for your ads. Google Search Ads, Youtube Ads
, Facebook Ads, Instagram Ads & Bing Ads are some of the examples that have CPA strategies you can use.
Should I am not using a CPA stategy on Google Ads, is it still important for me to look at CPA?
So, even if you are not using CPA as a strategy on ad platforms (if you are not bidding on action or conversion) and using other strategies like CPC or CPM, you can still analyze and monitor CPA and learn a lot from it. Because at the end in most campaigns where you are asking the user to complete some kind of action, the main focus of the campaign is to monitor how many people are making those actions and how much they cost you.