What is CPA?

CPA (cost per acquisition) is the average cost of achieving one conversion through paid advertising. CPA = total advertising costs / number of conversions. It is one of the most important KPIs in SEA because it shows directly what a customer or lead costs you on average.

How do you calculate CPA?

With conversion tracking in Google Ads, the CPA is calculated automatically. You can also steer on a target CPA with Smart Bidding as your bidding strategy: the system adjusts bids automatically to keep the average cost per conversion close to the target you set.

Target CPA as a bidding strategy

With the Target CPA bidding strategy, Google instructs the algorithm to optimise bids in every auction. This requires enough conversion data, at least 30 conversions per month. The Quality Score and relevant match types affect how much work Smart Bidding has to do to hit the target.

CPA versus ROAS

CPA steers on cost per conversion without taking the value of that conversion into account. ROAS steers on the ratio between revenue and costs. For lead generation CPA is more practical; for e-commerce ROAS is often better.

What is a good CPA?

That depends on your margin per conversion. Always make sure your CPA is lower than the gross profit per conversion.

How do I lower my CPA?

By raising the conversion rate of your landing page and filtering out irrelevant clicks with negative keywords.

Is CPA different from CPL?

CPL (cost per lead) is a subtype of CPA in which a lead is the conversion. More at developers.google.com/search.