How To Calculate Cost Per Acquisition (CPA)

When selling a product, and advertising it online, it typically does not make sense to sell on it at a loss. There are exceptions to every rule, and this will be covered in another article. For illustrative purposes, you sell a product or a service online, and you wish to sell it profitably using some method of online advertising or promotion. In cases such as this, you would want to calculate the cost per acquisition, typically referred to as the CPA. The cost per acquisition is really represented as:

Total Desirable Outcomes / Cost


CPA = Advertiser Cost / Conversions


CPA = Cost to an advertiser / (Number of ad impressions x CTR x CR)