Cost per acquisition (CPA), also referred to as cost per conversion, stands as a fundamental growth marketing metric that quantifies the total expense incurred when a user takes an action leading to a conversion. The conversion may encompass various actions, typically including a sale, purchase, click, sign-up, form submission, or app download.

The CPA formula is derived as follows:

CPA = Total Advertising Cost / Total Number of Conversions.

For instance, suppose you conduct an ad campaign across platforms like Facebook, Twitter, and Google over 7 days for your online eCommerce venture, resulting in a total advertising expenditure of $1000 and 50 conversions. In this scenario, your CPA amounts to $20 ($1000/50).

CPA serves as a critical metric for businesses, offering a perspective to evaluate campaign success. Yet, while many marketers prioritize traffic and sales acquisition, they often overlook cost optimization. Prioritizing cost optimization and reducing the cost per acquisition can significantly enhance return on investment (ROI) over a short span.

Cost Per Acquisition is integral to various paid marketing activities, including PPC, affiliate marketing, display advertising, social media marketing, and content marketing.

Methods for Tracking Cost Per Acquisition (CPA) by digital-first businesses encompass:

Utilizing UTM parameters to generate link codes for social media or affiliate marketing.
Exporting PPC campaign data from platforms like AdWords.
Employing promotional codes to create custom links for internal campaigns.
Implementing an efficient CRM system.
Incorporating a form field on lead forms to inquire how customers discovered a campaign, thereby minimizing lead attribution gaps.