CPA (Cost Per Acquisition)

CPA, which stands for Cost Per Acquisition, is a billing model used in marketing campaigns. CPA is a "cost per conversion" calculation, most often defined in terms of conversions on a website. With CPA you can get insight into what the cost of the action on your website has been.

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What is CPA?

CPA is a payment model used in online marketing, where you are paid for the number of actions and not the actual traffic on the website.

Cost Per Acquisition gives you insight into what you have to pay when a visitor through an ad takes a desired action on your website (also known as conversion). For example, you may want the customer to sign up to your newsletter or make a purchase.

Two other common forms of settlement are CPC (Cost Per Click) and CPM (Cost Per Mille).

Cost Per Acquisition is a tool you can use in different ways

Especially in affiliate marketing, CPA is widely used. Here, as a provider of certain products or services, you have the opportunity to make a large profit if you achieve successful marketing through your advertising agreements.

However, CPA is also an ad option that you can use for example on Facebook or in Google Ads.

Plan your budget based on your company's CPA and achieve the best ROI

Whatever media you advertise on, it's a good idea to focus on Cost Per Acquisition. That way, you always have an overview of what you pay for each conversion, so you can make the best deals with your advertisers.

In addition, knowing CPA allows you to plan your budget based on the traffic sources that will give you the best ROI (Return On Investment).

Calculate your CPA based on the following model:

Your total cost / number of conversions = CPA.

Be visible where it has the most value for your business

A tool like CPA is worth its weight in gold for your online marketing. This is where you have an extra opportunity to be visible to potential new customers.

But it's vital that you spend your marketing dollars where they will create the most value for your business - and an insight into CPA can help you do that.

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Do you need help with your business data or are you considering whether it makes sense for your business to focus on data collection? Contact Ian Rosenfeldt for a project dialogue.

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