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Performance

Cost per acquisition (CPA)

Also known as: cost per acquisition · cost per action · cost per conversion

Definition

Cost per acquisition is advertising spend divided by the number of conversions it produced, with the advertiser deciding what counts as one. A conversion can be a sale, a lead or a booking, so two CPAs are only comparable when the definition matches.

CPA is a media metric, and it's narrower than customer acquisition cost: it usually counts ad spend only, not agency fees, creative or salaries. It also counts only what the platform tracked inside its attribution window, so it can sit well above or below what your bank account shows. Reconcile it against real orders or closed deals every month.

The definition of a conversion steers everything, because automated bidding chases whatever is counted. If a WhatsApp button click counts the same as a signed contract, a Target CPA campaign will find the cheapest button-clickers. Set the ceiling from the margin. Say a product sells for AED 300 at a 40% gross margin: the profit on a first order is AED 120, and any CPA above that loses money on that order unless repeat purchases earn it back.

Formula

CPA = Ad spend ÷ Conversions

More in Performance

A/B testing

A/B testing compares two versions of one element, such as a headline, an offer or a page, by showing each to a randomly split share of traffic at the same time and measuring which produces more conversions. It needs enough traffic and one change at a time.

Ad fatigue

Ad fatigue is the decline in an ad's performance as the same people see it repeatedly, usually visible as rising frequency and falling click-through rate before cost per result climbs. The remedy is fresh creative or a wider audience, not a bigger budget.

Ad Rank

Ad Rank is the value Google Ads calculates in each auction to decide whether an ad is eligible to show and where it sits against others. It combines the bid with ad and landing page quality, minimum thresholds, competition, search context and the expected impact of assets.

Attribution window

An attribution window is the period after an ad interaction during which a resulting conversion is credited to that ad, commonly 1, 7 or 28 days for clicks and 1 day for views.

Break-even ROAS

Break-even ROAS is the return on ad spend at which advertising exactly pays for itself after product margin, calculated as 1 divided by gross margin. Any ROAS below it loses money on the sale, however healthy the dashboard looks.

Broad match

Broad match is the default Google Ads keyword match type, which can show an ad on any search Google judges related to the keyword, even one that doesn't contain its words. Google advises pairing it with Smart Bidding.

All 193 terms
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