Cost Per Acquisition (CPA) Calculator
You are below break-even but above your $36.00 target. Lower the cost per click or raise the conversion rate to close the gap.
How the cost per acquisition (CPA) calculation works
Divide ad spend by conversions
Use the same campaign and period for both. $2,000 of ads that bring 50 sales is a $40.00 CPA.
Find your break-even CPA
Average order value × gross margin is what one sale earns before ads. $120 × 40% = $48.00. Pay more than that per sale and the campaign loses money.
Set a target CPA
Take off the profit you want to keep. Keeping 10% of a $120 order leaves 30% for ads: $120 × 30% = $36.00 target CPA.
Adjust for leads
If a conversion is a lead, multiply the break-even and target CPA by your close rate. Closing 25% of leads turns a $48.00 break-even per sale into $12.00 per lead.
Worked example. A store spends $2,000 on ads in a month and gets 50 sales, a CPA of $2,000 ÷ 50 = $40.00. Its average order is $120 at a 40% gross margin, so each sale earns $48.00 before ads; that is the break-even CPA. To keep 10% of each order as profit, the target CPA is $36.00. At $40.00 the campaign makes $8.00 per sale, $400.00 in all, but is $4.00 above target.
Cost Per Acquisition FAQ
How do you calculate cost per acquisition?
Divide what you spent on ads by the number of conversions they brought in during the same period. $2,000 ÷ 50 conversions = $40.00 CPA.
What is the cost per acquisition formula?
CPA = ad spend ÷ conversions. A conversion is whatever action you count: a sale, a sign-up or a lead. Say which one when you report CPA, because a cost per lead and a cost per sale are very different numbers.
What is break-even CPA?
The most you can pay for one sale without losing money: average order value × gross margin. A $120 order at a 40% margin gives a $48.00 break-even CPA. For leads, multiply by the share of leads that buy.
What is target CPA?
The CPA you aim for so each sale still leaves profit after ads: order value × (gross margin − profit you want to keep). Google Ads also uses the name for a bid strategy, where you set the average amount you'd like to pay for a conversion.
What is a good CPA?
Any CPA below your break-even CPA makes money on the first sale; one below your target CPA meets your profit goal. There is no standard figure, because it depends on your prices and margins, so averages from other businesses say little about yours.
Is CPA the same as customer acquisition cost (CAC)?
No. CPA is the ad cost of one conversion in a campaign. CAC divides all marketing and sales costs, including salaries and tools, by new paying customers only, so CAC is usually higher. Use the customer acquisition cost calculator for that.
How does CPA relate to CPC and conversion rate?
CPA = cost per click ÷ conversion rate. At $1.20 a click and a 3% conversion rate, CPA is $1.20 ÷ 0.03 = $40.00. Cutting the click price or raising the conversion rate both lower CPA.