# Cost per acquisition (CPA)

URL: https://tnb-tech.com/en/glossary/cost-per-acquisition/

## What is cost per acquisition (CPA)?

Cost per acquisition (CPA) is ad spend divided by the conversions recorded in the same period — orders, enquiries or calls. Spend €1,500, get 60 enquiries, and the figure is €25. It counts advertising money only, so it sits below customer acquisition cost, which also carries tools, fees and people’s time. In ad platforms a target CPA doubles as the goal you hand to automated bidding.

**Example**

An accountancy firm puts €1,500 a month into search ads. At €0.80 a click that buys 1,875 clicks; at a 3.2% conversion rate, 60 enquiries. Cost per acquisition is 1,500 / 60 = €25.

Whether €25 is expensive comes from the next two numbers. If one enquiry in four becomes a client, and a client is worth €300 of margin in the first year, the most an enquiry may cost is 300 × 0.25 = €75. At €25 there is room for the budget to grow until the cost approaches that ceiling. Let the win rate slip to 10% and the ceiling falls to €30, which puts the same €25 on the edge.

**Why it matters for a business**

Cost per acquisition is the bridge between the ad account and the profit and loss. It still counts advertising money only: customer acquisition cost adds tools, fees and the team’s time, and is always the larger number. And when the conversion is an enquiry, the same figure is also the cost per lead; CPA is the wider term and covers orders and calls as well.

As a bidding target the figure is an average, not a cap: some conversions will cost double and others half. Automation learns from accumulated conversions — roughly thirty a month is the point where a target starts behaving like one rather than like a wish. One more warning: a cost per acquisition built on uncleaned tracking always looks good, precisely because it is counting the wrong action.

**What to ask**

- Which actions go into the number — every enquiry, or only the qualified ones?

- What is the cost by campaign and by keyword, rather than the account average?

- What can we afford, given our margin and win rate?

- Which attribution window is counted, and does it change between reports?

We run that calculation before a campaign starts in Google Ads: the target comes from your margin, not from an industry average.

- Services: [Google Ads](https://tnb-tech.com/en/services/google-ads/)
- Glossary: https://tnb-tech.com/en/glossary/