TikTok Ads CPA

What Is CPA?

CPA stands for Cost Per Acquisition and defines the cost incurred by a marketer or advertiser for a specific conversion that occurs as a result of their marketing efforts. This action could be a purchase, lead generation, email signup, app download, or any other desired outcome that aligns with the marketing campaign’s objectives.

CPA (sometimes referred to as Cost Per Action) allows advertisers to assess the effectiveness of their marketing campaigns. Knowing the cost per acquisition lets them determine how much they need to spend to gain a new customer or lead. Lower CPA is generally more desirable as it indicates that the advertiser is acquiring customers at a lower cost, making the campaign more profitable.

How to Calculate CPA?

The formula used to calculate CPA is the following:

CPA = Total Cost of Campaign / Number of Conversions or Actions

Here’s an example:

Suppose a company ran an online advertising campaign for a new product. They spent a total of $5,000 on the campaign, which included ad spend, creative production, and other marketing expenses. During the campaign, they tracked their conversions, and it resulted in 200 purchases of the new product.

In this case:
CPA = $5,000 (Total Cost of Campaign) / 200 (Number of Conversions)
CPA = $25 per acquisition

This means the company spent, on average, $25 for each customer acquisition or purchase made as a result of their marketing efforts.

What Is a Good CPA?

What you’ll consider a good CPA depends on where you run ads, your industry, and more.

For example, for B2B marketing, CPAs tend to be higher compared to B2C due to the complexity of B2B sales cycles. A good CPA for B2B campaigns could range from $50 to $500 or more, depending on the industry and product or service.

On the other hand, in the mobile app industry, a good CPA may be around $2 to $5 per app install, or a tad higher for more competitive app categories.

Based on the latest benchmarks provided by AdBraze, the average CPA across all industries for Facebook ads in 2022 was $18.68. According to this study, technology was the most expensive industry to advertise, while education had the most successful and least expensive ads.

Wordstream’s data shows that the average CPA for Google Ads range from $44 to $143, depending on the industry.

Keep up with future trends and instantly compare your performance to companies just like yours, regardless of your industry. Join our Benchmark Groups—it’s anonymous and free for everyone!

How to Improve CPA?

You can implement various strategies to improve your CPA:

• Refine audience targeting: Identify and target the audience segments that are more likely to convert. Use Databox dashboard reporting to get the most complete and accurate picture of your audience and put together insights from various data sources to fully understand your performance.
• Optimize ad creatives: Create compelling and relevant ad creatives that resonate with your target audience. Test different images, ad copy, and calls-to-action to find the most engaging combinations that drive conversions.
• Use effective keywords: If you’re running pay-per-click (PPC) campaigns, use relevant and targeted keywords to ensure your ads appear to users actively searching for products or services like yours.
• Improve landing pages: Ensure your landing pages are well-designed, easy to navigate, and provide a seamless user experience. Optimize the content and layout to encourage visitors to take the desired action.
• Use retargeting: Implement retargeting campaigns to reach users who have previously shown interest in your products or services. Retargeting can help re-engage potential customers and improve conversion rates.
• A/B testing: Continuously test different elements of your campaigns, such as ad copy, images, landing page layouts, and calls-to-action. A/B testing allows you to identify the most effective combinations for reducing CPA.

More resources to help you improve:

• 24 Effective Strategies to Reduce Facebook Ads CPA
• 20 Ways to Conduct a Meaningful PPC Audit
• 15 Ways to Optimize your Facebook Ads Bid Strategy
• What is Customer Acquisition Cost and How to Keep it at a Minimum
• How to Understand Your Business Better by Analyzing CAC and CLV Metrics
• How Much Do Google Ads Cost? Understanding Google Ads Pricing in 2023
• Acquisition vs Retention Marketing: Which One is More Important for Your Business?
• Acquisition Reports In Google Analytics: Everything You Need to Know
• Cost Cap vs. Bid Cap: Which One Will Supercharge Your Facebook Ad Campaign?