CPA calculator
Cost per acquisition is spend divided by conversions, but computing it that way tells you nothing about why it is high. This calculator builds CPA up from CPM, hook rate, click-through rate and conversion rate, so the output names the stage that is costing you rather than just the total.
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The formula
Cost per click = (CPM / 1,000) / click-through rate
CPA = cost per click / conversion rate
Written out fully, CPA = CPM / (1,000 x CTR x CVR). Three multipliers, which is why the last three rows of the output matter more than the first: they show what each lever would have to reach on its own, and one of them is usually obviously impossible while another is obviously achievable.
How to read the result
Creative moves the first two multipliers and cannot touch the third. If the conversion rate is what would have to double, the fix is on the landing page or in the offer, and no amount of hook testing will find it.
| What has to move | Where the work is |
|---|---|
| Hook rate | The opening seconds of the creative |
| Click-through rate | The argument and the offer in the ad |
| Conversion rate | The landing page, price and checkout |
| CPM | Audience, placement and bidding, not creative |
What people get wrong
- Computing CPA only as spend over conversions, which gives a number with no diagnosis attached.
- Testing creative to fix a conversion-rate problem. Creative cannot reach past the click.
- Reading CPA before there are enough conversions to mean anything. Ten conversions is not a measurement.
- Comparing CPA across audiences with different CPMs and calling it a creative result.
Frequently asked questions
How do you calculate CPA?
Divide spend by conversions, or build it up as CPM divided by (1,000 x click-through rate x conversion rate). The second form shows which stage is responsible.
What does creative actually change in CPA?
Hook rate and click-through rate. It cannot change your conversion rate or your CPM, so if those are what would have to move, creative testing is the wrong project.
How many conversions do I need before trusting a CPA?
Enough that a couple of extra sales would not change the decision, which in practice is on the order of 15 per variation before comparing variations on cost.