A desirable cost-per-acquisition (CPA) in online advertising represents the optimal price a business should pay for a conversion, such as a sale, lead, or app install. It’s a key metric for evaluating campaign effectiveness and return on investment (ROI). For example, if a business sells a product for $100 and sets a CPA target of $20, they aim to acquire a customer for no more than $20 in advertising spend.
Optimizing for an appropriate acquisition cost is crucial for profitable advertising campaigns. By setting a realistic and data-driven CPA goal, businesses can control spending, maximize returns, and ensure sustainable growth. Historically, advertising focused on metrics like impressions and clicks. However, the rise of performance marketing has shifted the focus to outcome-based metrics like CPA, providing a more direct measure of campaign success.