What is the Cost per Acquisition

The Cost Per Acquisition, also known as CPA, is the unit cost obtained through a marketing strategy.

In practice, the advertiser incurs a cost for each conversion achieved.

The cost per acquisition evaluates the productivity of an advertising campaign and indicates the efficiency of media when conveying an advertising message.

As for digital marketing, on the other hand, the cost per acquisition is used to plan and purchase display advertising campaigns.

How to Calculate Cost Per Acquisition

The cost per acquisition is obtained:

Advertising action cost / number of conversions

The conversions are generated from the same advertising campaign.

In addition to the cost per acquisition, marketing campaigns must also consider Cost Per Contact (CPC), Cost Per Click (CPC), Cost Per Action (CPA).

For brand awareness campaigns, instead, the main cost indicators are the   Cost Per Mille (CPM) is the Cost per GRP (CPG).

The main parameters, therefore, that measure the effectiveness of marketing campaigns are: the response rate, the conversion rate, and the proof of purchase.

In conclusion, we can define that cost per acquisition is a metric that allows evaluating the effectiveness of online advertising campaigns.

Why CPA is an Important Metric

The cost per acquisition is an important metric used to measure conversion rates.

Conversions are a primary indicator of the effectiveness of a marketing campaign; hence, CPA provides assessments of a campaign's success.

The cost per acquisition is used in various paid marketing mediums:

• PPC;
• Affiliate;
• Social media;
• Content Marketing;

It can also be used for SEO and for an e-commerce as well as other platforms without direct advertising costs.