## CPA Calculator

## (cost / conversions) = CPA

## What is CPA?

Cost per Acquisition (CPA) refers to how much it costs you in order to obtain each of your customers during a certain period of time. CPA is the cost of acquiring a non-paying user, for example, cost per lead, cost per signup, cost per registration or cost per activation. On the other hand, CAC (Customer Acquisition Cost) specifically measures the cost of acquiring a paying user.

CPA is calculated by dividing your marketing costs by the number of new customers you acquire. CPA is a good indicator of your ad campaign’s effectiveness at generating conversions. You should aim to continuously reduce your CPA, ensuring your campaigns are as cost-effective as they can be.

You probably pay for every impression your ads get, but only some of those lead to conversions. By calculating your CPA, you can find out how many customers you get for the amount you pay, and how much each of those customers costs you!

## How to Calculate CPA

There are a few simple steps to calculating your CPA:

- Calculate your CPM – how much you pay per 1000 impressions on your ad campaign. Not sure how to do this? Check out our article on how to calculate CPM!
- Next, calculate your CTR (click-through rate)
- Then calculate your conversion rate – how many of these clicks lead to conversions.

Here is a simple formula you can use to calculate your CPA:

**Cost of advertising / ****number of conversions = CPA**

For example, your campaign cost you $50,000, and you gained 5000 customers.

50,000 / 5000 = 10

Your CPA would be $10 – meaning you spent $10 to gain each customer.

In Excel and Google Sheets, calculate your CPA using the following steps:

- Enter your marketing costs in the first cell
- Enter the number of customers acquired in a second cell
- In a third cell, input the formula (A1/A2)

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