What is Cost Per Acquisition (CPA) and how is it calculated?
Posted: Thu Jan 02, 2025 10:45 am
Definition: Although we have already talked about this concept and its definition, we will recall some important things that must be clarified or understood by the advertiser, the publisher and the Internet user:
CPA, or cost per acquisition, is the most important number to calculate when running or paying for your online advertising. Why? Regardless of the type of advertising you’re paying for, CPA represents the actual conversion amount you’re going to pay. Formula: For example, if you pay $100 for 100 views on a website and 10 people decide to take action on your offer, your CPA will be $10. In other words, you pay $10 for every new customer you get. How do you calculate this number? What is cost per acquisition? Here’s the formula provided by RedReefDigital :
CPA = (marketing costs + sales costs) / $ of new customers
However, we can find another formula, based on your actual online advertising spend:
CPA = Cost per click * Actual clicks / leads or CPA = Cost per thousand / Actual leads
What is the average cost of a cost per click and therefore, the cost per action in digital advertising? According to Wordstream, the average cost of advertising on Google Adwords is $2.32 on the search platform poland whatsapp data and $0.58 on the Display Network. The same source puts the average cost per action (CPA) on the Google ad network at $59.18. On Facebook, on the other hand, the CPA is a bit smaller. On average, it comes to $18.68 for a cost per click of only $1.72. At the same time, advertising on Bing search costs at least $50 per click. Here is a short list of CPCs, click-through rates, and conversion rates on Facebook, by industry:
What about cost per mille? How much should you pay for a thousand impressions? The best answer to this question comes from Adstage . After analyzing several hundred million ad impressions, they calculated the average cost per mille to be $2.80. These numbers are available on the Google ad network.
CPA, or cost per acquisition, is the most important number to calculate when running or paying for your online advertising. Why? Regardless of the type of advertising you’re paying for, CPA represents the actual conversion amount you’re going to pay. Formula: For example, if you pay $100 for 100 views on a website and 10 people decide to take action on your offer, your CPA will be $10. In other words, you pay $10 for every new customer you get. How do you calculate this number? What is cost per acquisition? Here’s the formula provided by RedReefDigital :
CPA = (marketing costs + sales costs) / $ of new customers
However, we can find another formula, based on your actual online advertising spend:
CPA = Cost per click * Actual clicks / leads or CPA = Cost per thousand / Actual leads
What is the average cost of a cost per click and therefore, the cost per action in digital advertising? According to Wordstream, the average cost of advertising on Google Adwords is $2.32 on the search platform poland whatsapp data and $0.58 on the Display Network. The same source puts the average cost per action (CPA) on the Google ad network at $59.18. On Facebook, on the other hand, the CPA is a bit smaller. On average, it comes to $18.68 for a cost per click of only $1.72. At the same time, advertising on Bing search costs at least $50 per click. Here is a short list of CPCs, click-through rates, and conversion rates on Facebook, by industry:
What about cost per mille? How much should you pay for a thousand impressions? The best answer to this question comes from Adstage . After analyzing several hundred million ad impressions, they calculated the average cost per mille to be $2.80. These numbers are available on the Google ad network.