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In marketing and advertising, CPA refers to the cost per acquisition. How much does it cost in ad spent to get a lead, a conversion, an app install, or any other conversion metric used in your KPI.
Measuring your cost per acquisition is one of the ultimate metrics to determine if your paid media strategy or campaign is profitable or not. Make sure that you are determining a target CPA beforehand. The CPA is the pulse that helps you decide between doubling down or shutting down a campaign, ad group or creative.
The cost per acquisition formula is very straightforward, it equals your total cost divided by your total conversion (or acquisition) :
CPA = Total Cost / Total Acquisitions
A good CPA depends on the service/product you promote. If you are advertising a free mobile app, your target CPA will be lower than if you are selling a car, for example. As a rule of thumb, you should target a CPA that would give you a ROAS (return on ad spend) higher than 2.
Many levers can help lower your cost per acquisition:
● Identify your target persona and target it in audience settings (A/B test different personas).
● Create engaging content and visuals in your ads (UGC content, for example).
● Make your offer and USP clear and appealing.
● Work on your ad copy to engage your audience.
● Make the conversion process on your landing page easy.