How to calculate CPA
CPA = total campaign cost ÷ number of conversions
CPA as a pricing model
In some advertising and affiliate programs, CPA means cost per action: the advertiser pays only when a user completes a set action, such as a purchase or a form submission, rather than paying for clicks or impressions.
CPA in Google Ads
Google Ads reports cost per conversion, and its target CPA bidding sets bids automatically to get as many conversions as possible at or below the CPA you choose. It needs reliable conversion tracking and enough conversions to work well.
What is a good CPA?
One that leaves a profit. Compare the CPA with what a conversion is worth: the profit from a sale, or a lead’s chance of becoming a customer multiplied by that customer’s value. A lead that costs 500 kr is cheap if one in five becomes a customer worth 10,000 kr.
How to lower CPA
- Raise the conversion rate with better landing pages and offers.
- Cut spend on keywords, audiences and placements that don’t convert.
- Improve Quality Score to lower your cost per click.
- Use negative keywords and tighter targeting.
CPA example
A campaign spends 6,000 kr on Google Ads and gets 24 leads. CPA is 250 kr per lead. If one in four leads becomes a customer, the cost per customer is 1,000 kr. If each customer brings 3,000 kr in profit, the campaign makes money. If profit per customer is only 800 kr, the campaign loses money even though 250 kr per lead looks cheap.
How to lower your CPA
- Add negative keywords and remove audiences that do not convert.
- Improve ad relevance and the landing page, which also helps Quality Score.
- Shorten forms and checkout.
- Track real conversions so automatic bidding learns from the right signal.
- Move budget from expensive to cheaper campaigns that bring good customers.
CPA mistakes
- Comparing CPA across goals of different value, such as a newsletter sign-up and a sale.
- Setting a target CPA that is far below what the market allows.
- Ignoring lead quality and counting every form as a win.
- Judging a campaign before it has enough conversions.
CPA FAQs
What is the difference between CPA and CAC?
CAC covers the full cost of winning a paying customer. CPA measures a single conversion in a campaign.
Which other cost metrics should I track?
Follow cost per click and return on ad spend alongside it.