The CPA, acronym for Cost per Action, also known as Cost per Acquisition, is a payment method for online campaigns with the goal of having the consumer perform a certain action.
In practice, it is the cost of a specific action taken by the user, such as purchasing a product, clicking to a website, signing up for a newsletter, etc.
This method is often used on the web, but it is more difficult to use on other media like TV or radio.
Google has many tools to monitor the actions that users take on our advertisement; an example is Google Analytics.
How is the cost per action calculated?
The formula to calculate the Cost per Action is:
CPA = TOTAL COST / NUMBER OF TRACKED ACTIONS
Example
Let's make an example:
Suppose that the advertiser creates an online campaign worth 10,000 euros with a goal of link clicks and that 100 users have performed the action.
The calculation will be:
CPA = 10,000 / 100 = 100 euros
The cost of the CPA for the campaign will therefore be 100 euros.
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