What is Cost Per Action (CPA)?

A pricing model where advertisers pay only when users complete a specific action like registration, purchase, or app install.

Cost Per Action (CPA) is a performance-based advertising pricing model where advertisers pay only when users complete a predefined action. Actions can include app installs, registrations, purchases, subscriptions, or any valuable conversion event. CPA campaigns focus on driving quality users who take meaningful actions rather than just clicks or impressions.

Why It Matters

CPA offers the lowest risk for advertisers since payment occurs only after desired outcomes. It aligns advertiser goals with publisher incentives, ensuring campaigns focus on quality traffic. CPA is ideal for performance marketing campaigns where ROI can be directly measured through specific conversion events.

How to Calculate

CPA = Total Ad Spend ÷ Number of Actions Completed. For example, if you spent $1,000 and achieved 50 sign-ups, your CPA would be $1,000 ÷ 50 = $20 per sign-up.

Industry Benchmarks

Best Practices

Define clear, valuable actions that indicate user quality. Set up proper conversion tracking and attribution windows. Monitor post-action metrics like retention and LTV to ensure quality. Use CPA bidding strategies that optimize for long-term value, not just immediate conversions.

Examples

A fitness app sets CPA goal of $8 per premium subscription sign-up, tracking 7-day retention rates to ensure quality users. An e-commerce app optimizes for $25 CPA per first purchase, then tracks customer LTV to refine targeting.

Notes

CPA campaigns require robust tracking infrastructure and clear action definitions. Attribution windows typically range from 1-day to 30-days depending on the action complexity. CPA can be combined with other models in funnel optimization strategies.