What does CPA stand for in marketing? It's a common question for both current and potential digital marketing clients.
Get answers below.
What Does CPA Stand for In Marketing?
CPA stands for Cost-Per-Acquisition (CPA). CPA is a formula that can be used to evaluate the effectiveness of an advertising campaign.
The formula for Cost-Per-Acquisition (CPA) is as follows:
- Total Campaign Cost (divided by) Acquired Leads [also known as conversions]
Why Does CPA Matter?
Understanding Cost-Per-Acquisition (CPA) is an important part of understanding ROI from advertising efforts. Essentially, Cost-Per-Acquisition is a measurement of how much you spend in advertising dollars to acquire a single lead. Because of this, knowing your Cost-Per-Acquisition (CPA) is important for evaluating if advertising efforts are effective, or if the cost of advertising outweighs the money brought in from new business that is acquired from advertising.
Advertise Effectively with Us
Cost-Per-Acquisition (CPA) can be impacted by how effective advertising efforts are. For example, if you're spending advertising dollars on campaigns that are highly targeted and show only to people who are most likely to be a customer for your business, then you're more likely to have a positive CPA. This is because your advertising dollars are being spent on showing ads to people who are most likely to become customers, whether that's through demographic targeting or something as specific as people who are actively searching for the exact services or products you offer. 
This is why digital marketing is so much more effective than more traditional forms of marketing. Because of data collected by online advertisers, such as Google and Facebook, digital marketing campaigns can show ads to people who are most likely to be customers -- whether that's people who are actively looking for the products or services you offer based on their online activity, or people who are more likely to be in need of your products or services, like showing ads for a wedding venue to people who are recently engaged.
Comparatively, with other types of advertising, such as TV, radio, billboards or print ads, your advertising dollars aren't being spent to show your ad to people who you know are interested in your products or services. Instead, other types of advertising shows your ad within your service region, and you're stuck hoping that people who need what you're offering see or hear the ad. This effectively means that, with other types of advertising, you're wasting advertising dollars on every person who sees your ad and isn't in need of your products or services.
To advertise more effectively, and to get a better return from your advertising budget...