What is cost per acquisition (CPA)?

• A. CPA is the total ad spend per campaign.
• B. CPA is the average cost paid for each conversion, indicating how much a business spends to acquire a customer.
• C. CPA is the revenue per conversion.
• D. CPA is the number of conversions per day.

Answer: (B)

Cost per acquisition focuses on how much you spend to obtain a customer or a defined action. It is calculated by dividing total ad spend by the number of conversions, giving the average cost per conversion. This helps you gauge campaign efficiency and compare performance across channels, since it ties spending directly to the outcome you care about (purchases, signups, or leads). It’s different from total ad spend (that’s the overall amount spent, not per conversion), revenue per conversion (that measures income, not cost), or the number of conversions (a volume metric, not cost). It’s also distinct from metrics like CPC or CPM, which look at cost per click or per impression rather than cost per conversion.