Marketing metrics explained

What is CPA in marketing

CPA stands for cost per acquisition: the amount you spend on advertising for each conversion you get back.

About the Google Ads connector

If you spent £1,200 on a campaign and it produced 48 sales, your CPA is £25.00. Accountants use the same three letters for something else entirely; this page is about the marketing one.

"Acquisition" means whatever you have told your ad platform to count as a conversion. For a shop that is usually an order. For a software company it might be a trial sign-up or a demo booking. The number only means something once you know which.

How it's calculated

CPA = ad spend ÷ conversions

Both figures come from the same platform over the same period. The full version, with a Google Sheets formula that handles zero conversions and a worked example, is on the CPA formula page.

What it tells you, and what it doesn't

CPA tells you the price of one conversion from one channel, campaign or ad group. That makes it the right number for comparing two campaigns that produce the same kind of conversion, and for deciding where the next pound of budget goes.

It tells you nothing about what the conversion was worth. A £25 CPA is excellent for a £300 order and ruinous for a £20 one. CPA is a cost, and a cost needs a revenue or margin figure beside it before it becomes a decision. ROAS is the usual partner.

It also only counts the conversions the platform saw. Google Ads reports the conversions its own tracking recorded, under its own attribution rules. A customer who clicked an ad, left, and came back a week later through a search may or may not be counted, depending on the conversion window and the attribution model you have set.

Where it goes wrong

Mixing conversion types. If one campaign counts purchases and another counts newsletter sign-ups, their CPAs are not comparable, and a report that puts them in one column with one total will mislead whoever reads it. Check what each campaign's conversion action is before comparing.

Averaging CPAs. A campaign with 2 conversions and one with 200 should not carry equal weight. =AVERAGE() across a column of CPAs gives them exactly that. Divide total spend by total conversions instead.

Looking at platform CPA and calling it the cost of a customer. Platform CPA covers one channel's spend and one channel's conversions. The cost of acquiring a customer across everything you spend, including the people who had to be paid to run the campaigns, is CAC. The two numbers answer different questions and are often a long way apart.

Short windows. A week with a handful of conversions gives a CPA that bounces around for no reason. Use a period long enough for the conversion count to settle, or treat the figure as a rough guide.

Related metrics

• CPA formula: the calculation and a worked example.
• CAC formula: cost per customer across all marketing spend, not one platform's.
• CPC: what you pay per click, one step earlier in the funnel.
• ROAS: revenue per pound of spend, the figure that tells you whether a CPA is affordable.
• Conversion rate formula: CPA is CPC divided by conversion rate, so a change in either moves it.

Keeping it current

A scheduled Fresh Sheets report can pull Cost and Conversions from Google Ads into a tab of your spreadsheet, by campaign, daily or weekly. It replaces that tab's contents on every refresh, so keep your formulas on a separate tab and point them at the data tab by heading:

=SUM(INDEX('Google Ads'!A:Z, 0, MATCH("Cost", 'Google Ads'!1:1, 0))) / SUM(INDEX('Google Ads'!A:Z, 0, MATCH("Conversions", 'Google Ads'!1:1, 0)))

That gives a total CPA that survives the columns moving when you add a field.