CPA stands for Cost Per Acquisition. It is a metric used in TikTokAds to measure the total cost of acquiring a customer. It is calculated by dividing the total cost of the ad by the number of conversions, such as a purchase, sign-up, or download. A lower CPA suggests that the ad campaign is more effective in acquiring customers.
With Databox you can track all your metrics from various data sources in one place.
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.
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 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:
More resources to help you improve:
Used to show a simple Metric or to draw attention to one key number.
Used to illustrate numerical proportions through the size of the slices.
Used to show comparisons between values.
Databox is a business analytics software that allows you to track and visualize your most important metrics from any data source in one centralized platform.
To track CPA using Databox, follow these steps:
Get a high level overview of the performance of your TikTok Ads account.
Enhance your social media advertising and dive into performance metrics for your Facebook, TikTok, LinkedIn, and X ads—all in one easy-to-use template. Perfect for understanding what’s driving results and optimizing your ad spend.
High CPAs suggest that the marketing campaign or advertising efforts are not as efficient as they could be. The campaign might not be effectively reaching the target audience, or the messaging and offers may not resonate well with potential customers. It’s essential to analyze the marketing strategy, targeting, ad creatives, and landing pages, and conduct A/B testing to identify areas for improvement and cost reduction.
Several factors can contribute to a high CPA (Cost Per Acquisition) in marketing campaigns, such as:
To address a high CPA, marketers should continually monitor their campaigns, analyze performance data, and make data-driven decisions to optimize targeting, creatives, landing pages, and conversion processes.
The Impressions by Ad Group metric refers to the total number of times an ad within a specific ad group was shown to TikTok users, regardless of whether or not they interacted with it. It helps advertisers track the reach of their ads and determine their overall impact.
CTR by Ad Group is a measure of how many clicks your ad received relative to the number of times it was shown in each of your ad groups. It helps you understand which ad groups are performing well and which ones need improvement.
Reach by Campaign is a performance metric that measures the total number of unique TikTok users who have viewed or interacted with an ad campaign during a given time frame.
The Conversion metric measures the number of desired user actions taken on an ad, such as making a purchase or filling out a form, in relation to the number of ad impressions or clicks. It indicates the effectiveness of an ad in driving valuable actions and helps optimize ad campaigns for better results.
CVR by Campaign measures the Conversion Rate (CVR) of a specific advertising campaign on TikTok, which represents the percentage of users who took the desired action (i.e., converted) out of the total number of users who viewed the ad. It helps to determine the effectiveness of a campaign in driving conversions.
Real-time CVR by Ad Group is a performance metric that measures the conversion rate of a specific ad group in real-time. It helps to optimize ad spend and adjust ad strategies based on the data to achieve maximum ROI.
The Real-time Result by Ad metric allows you to see the performance of your ad campaigns in real-time, providing instant feedback on key metrics such as impressions, clicks, and conversions. This allows you to quickly identify which ads are performing best and adjust your strategy accordingly.
The percentage of results you achieved out of all of the views/clicks on your ads during the specified Date Range split up by Ads. The total count is based on when the conversion actually happened.