cost per acquisition

Cost per acquisition is a metric and pricing model in online advertising that measures the cost required to obtain a specific action from a user. The term is sometimes used interchangeably with cost per action, though it specifically refers to acquiring customers or conversions. CPA is calculated by dividing the total advertising cost by the number of completed acquisitions.

Context and Usage

Cost per acquisition is primarily used in digital marketing campaigns across various platforms including search engines, social media, and display advertising networks. Marketers, advertisers, and affiliates use this metric to evaluate the efficiency of their customer acquisition efforts and to set bidding strategies in performance-based advertising models.

Common Challenges

Common challenges include tracking accuracy across multiple touchpoints, attribution difficulties when customers interact with various channels before converting, and the potential for fraudulent activities that may inflate acquisition numbers. Marketers may also struggle with defining what constitutes a valid acquisition and ensuring consistent measurement across campaigns.

Related Topics: cost per action, customer acquisition cost, pay per click, conversion rate optimization, return on ad spend