Cost Per Acquisition, measuring the cost to gain a customer.
NOIR & BLANCO COMMUNITY
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CPA (Cost Per Acquisition) is a marketing metric that measures how much a business spends on advertising or marketing to acquire one customer or one desired conversion, such as a purchase, signup, or lead.
CPA formula
CPA = Total Advertising Cost ÷ Number of Acquisitions
For example, if a business spends ₹50,000 on advertising and gets 500 purchases:
CPA = ₹50,000 ÷ 500 = ₹100
This means the business spends an average of ₹100 to acquire each customer.
Why CPA is important
Important: CPA and ROAS measure different things. CPA measures the cost per acquisition, while ROAS measures the revenue generated relative to advertising spend. A low CPA is not necessarily profitable if customers generate little revenue or have low lifetime value.