Want to know how much you're paying for each lead or customer from CPM-based ads? Use this free CPA Calculator to calculate your cost per acquisition using impressions and conversion rate.
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.
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.
A good CPA depends on your business type and how much you earn per customer.
👉 Rule of thumb: If your CPA is less than your customer lifetime value (CLV), you're on the right track.
A bad CPA means you're spending more money to get a customer than you earn from them.
Examples of bad CPA situations:
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