Free Cost Per Acquisition Tool: CPA using CPM Calculator

What is Cost Per Action (CPA) or Cost Per Acquisition?

Cost Per Action (CPA), also known as Cost Per Acquisition, is a digital advertising metric that measures the cost of acquiring a customer or triggering a specific action, such as a sale, sign-up, or download. 

Advertisers pay only when the desired action occurs, making CPA a performance-based pricing model.

How to Calculate CPA Using CPM

If you're paying for impressions (CPM), and want to find out how much each acquisition is costing you, here’s how to do it.

Step 1: Know your CPM

This is how much you're paying for 1,000 ad views (impressions).
Example: ₹300

Step 2: Know your Conversion Rate

This is the percentage of people who take the action (like signing up or buying).
Example: 5%

Step 3: Use the CPA Formula

CPA = (CPM / 1000) ÷ (Conversion Rate / 100)

Example:

CPA = (300 / 1000) ÷ (5 / 100)

CPA = 0.3 ÷ 0.05 = ₹6 per action

⭐ So, you're spending ₹6 for each lead or customer.

What Is a Good CPA?

A good CPA depends on your business type and how much you earn per customer.

• For e-commerce: ₹100–₹500 per purchase might be good
• For SaaS: ₹500–₹2,000 per sign-up could be okay
• For high-ticket B2B: even ₹5,000 CPA might work if the customer value is high

👉 Rule of thumb: If your CPA is less than your customer lifetime value (CLV), you're on the right track.

What Is a Bad CPA?

A bad CPA means you're spending more money to get a customer than you earn from them.
Examples of bad CPA situations:

• ₹1,000 to get a sale of ₹400
• ₹200 per lead that never converts
• High CPA with no way to lower it over time

How to Improve CPA (Make It Lower):

• Improve your ad targeting – Show ads to the right people
• Use better creatives – Clear headlines and strong calls to action
• A/B test landing pages – Make pages convert better
• Focus on high-intent audiences – Retarget people who already know your brand
• Lower CPM – Optimize ad placements to pay less per impression
• Increase conversion rate – Every 1% boost makes your CPA cheaper