Enter your ad spend and conversions for your CPA. Add what a conversion is worth and your margin, and you'll also get your maximum affordable CPA, the profit or loss per conversion, and how much headroom your bids really have.
CPA is a price. Max affordable CPA is your budget.
Cost per acquisition is the plainest arithmetic in marketing: ad spend divided by conversions. $2,400 for 60 sales is a $40 CPA. What no dashboard will tell you is whether $40 is a bargain or a slow-motion emergency, because that depends on a number Google does not know: what one conversion is actually worth to you.
That ceiling is your maximum affordable CPA: the gross profit one conversion brings in. A $150 order at a 40% margin carries $60 of profit, so $60 is the most you can pay to acquire it and keep anything. Every dollar of CPA below the ceiling is money you keep; the first dollar above it turns your ad account into a machine that buys customers at a loss, efficiently and at scale. This page computes both numbers and, more usefully, the distance between them.
The formula
CPA = Ad spend ÷ Conversions Max affordable CPA = Value per conversion × Margin
Profit per conversion = Max CPA − CPA
Margin is a decimal in the formula (40% = 0.40). Leave it out and the ceiling runs on revenue, which is fine for comparing campaigns against each other and flattering for judging profit.
Worked example
A campaign spends $2,400 and produces 60 orders: a $40 CPA.
Each order averages $150 at a 40% margin, so a conversion carries $60 of gross profit: a $60 max affordable CPA. At $40 against a $60 ceiling, the campaign keeps $20 per order, $1,200 across the 60, with 33.3% headroom: bids could rise a third before profit hits zero.
Same campaign selling a $80 product instead: the ceiling drops to $32, and the identical $40 CPA now loses $8 per order, $480 in total. Nothing about the campaign changed. Only the ceiling did.
CPA vs CAC, and the lead problem
CPA and CAC get used interchangeably and should not be. CPA prices one conversion action in one channel: this campaign, these orders. Customer acquisition cost is the company-wide version: all sales and marketing spend divided by all new customers, agency fees and salaries included. Your CPA can be a happy $40 while your true CAC is $95, and boards fund the second number, not the first.
Two ceilings deserve a better number than first-order value. If a conversion is a new customer who reorders for years, the honest ceiling is lifetime value based, and our customer lifetime value calculator builds it; acquiring at a first-order loss can be the right move when the retention math says so, but only when it says so in writing. And if a conversion is a lead rather than a sale (a form fill, a newsletter signup, a demo request), its value is the sale it eventually becomes times the rate at which it becomes one; our email signup value calculator does exactly that translation before this page's comparison makes sense.
Frequently asked questions
What is CPA and how is it calculated?
Cost per acquisition: ad spend divided by the conversions it produced. Spend $2,400 for 60 orders and your CPA is $40. It prices one conversion action in one channel, and on its own it says nothing about whether that price is worth paying.
What is a good CPA?
Any CPA below your maximum affordable CPA, which is the gross profit one conversion brings in. There is no industry benchmark that can answer this for you, because a $40 CPA is excellent against a $60-profit order and ruinous against a $32 one. Compute your own ceiling first; judge second.
How do I work out my maximum affordable CPA?
Multiply the value of one conversion by your gross margin. A $150 order at a 40% margin carries $60 of profit, so $60 is break-even and anything below it is money you keep. If conversions are new customers who reorder, use lifetime value instead of first-order value and the ceiling rises accordingly.
What is the difference between CPA and CAC?
Scope. CPA prices a conversion within a channel or campaign; customer acquisition cost divides all sales and marketing spend, salaries and agency fees included, by all new customers. CPA tells you which campaign to scale; CAC tells you whether the business model works.
What is the difference between CPA, CPC, and CPM?
Three different things being priced: CPM is a thousand ad impressions, CPC is one click, CPA is one completed conversion. They form a funnel, and CPA is CPC divided by your conversion rate, which is why a cheap click on a page that never converts is still an expensive acquisition.
How does Target CPA bidding use this number?
Google's Target CPA strategy bids to bring your average cost per conversion in at the target you set, so set it from your ceiling: at or below max affordable CPA, with room for the margin of error in your value estimate. A target above the ceiling instructs the machine, very efficiently, to buy conversions at a loss.
What if my conversions are leads, not sales?
Then a conversion's value is the sale it eventually becomes, multiplied by the rate at which leads become sales. A $1,000 job won from 10% of leads makes each lead worth $100 before margin. Our email signup value calculator does this translation properly, confidence interval included, and its output plugs straight into this page's value field.
Should my CPA include agency fees or my time?
For channel decisions, no: keep CPA to media spend so campaigns compare fairly. For business decisions, yes: add management fees and tool costs, at which point you are computing CAC. The mistake is mixing the two, comparing a fee-loaded CPA in one channel against a media-only CPA in another.