Cost per Acquisition (CPA)

Cost per Acquisition (CPA) is a billing model in online marketing, where advertisers only pay when a predefined conversion is achieved. This could be a purchase, a registration, a sign-up for a newsletter, or another desired action. CPA is part of performance-based billing models and is often used in performance marketing campaigns.

In contrast to CPM (Cost per Mille), which is based on 1,000 impressions, or CPC (Cost per Click), where each click costs, the advertiser only pays in the CPA model when an actual conversion occurs. This makes this model particularly efficient, as it is directly linked to the campaign's success.

An example of using CPA is an e-commerce campaign, where a company only pays for customers who complete a purchase through an advertisement. CPA is particularly common in affiliate marketing networks, as partners only receive a commission when a specific action is performed by a referred user.

A major advantage of the CPA model is the predictability and cost control. Companies can allocate their advertising budget precisely and ensure that they only pay for measurable successes. However, the cost per conversion is often higher than with other models, as the advertiser shifts the risk to the publisher or the advertising network.

For companies focused on ROI-driven marketing, CPA offers an efficient way to link advertising spending directly to business success. An optimized campaign strategy that focuses on targeted targeting, A/B testing, and conversion optimization can reduce CPA costs and increase profitability.