Enter spend and conversions to calculate your cost per acquisition. Add average order value and gross margin to see the highest CPA you can afford before a sale stops being profitable.
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How CPA is calculated
CPA = ad spend ÷ conversions. 2,400 spent for 48 conversions is a CPA of 50.
Find your maximum CPA first
Maximum CPA = average order value × gross margin. With a 180 order and a 45% margin, you break even at a CPA of 81. For lead generation, multiply further by your lead-to-customer close rate: if one in five leads becomes a customer, the maximum cost per lead is one fifth of the maximum cost per customer.
Setting a Target CPA in Google Ads without this number is guessing. Set it too low and the campaign stops spending; too high and it buys unprofitable conversions.
Frequently asked questions
What is the difference between CPA and CPL?
CPL is the cost of a lead; CPA usually means the cost of a paying customer. Be explicit about which conversion you are counting.
How many conversions does Target CPA bidding need?
Smart Bidding works better with more data. If a campaign gets only a handful of conversions per month, results will be unstable; consolidating campaigns or optimising for an earlier funnel step can help.
Why did my CPA jump suddenly?
Check conversion tracking first, then search terms, budget changes, new competitors and landing page speed or availability.