CPA (cost per acquisition)
CPA stands for cost per acquisition: what you spend on ads on average for one desired action, such as a quote request. You divide your ad costs by the number of conversions.
- 3 min read
What is CPA?
CPA, cost per acquisition, is the price of one result. What that result is, you decide. For a webshop it is often an order. For a roofer, contractor or installer it is usually a Quote request, a booked call or a completed contact form.
The formula is simple: ad costs divided by the number of conversions. If you spend a thousand euros in a month and twenty enquiries come out of it, your CPA is fifty euros. In Google Ads this number is called cost per conversion.
Why CPA matters for your business
CPA tells you what growth costs. Where clicks and impressions only say something about attention, CPA shows what you pay for a concrete chance of work. That lets you compare your ad costs with what a job brings in.
For trade businesses, CPA is often more useful than ROAS. A quote request has no revenue yet at the moment of the click. That only follows weeks later, when the customer signs. With CPA you steer on something you can measure straight away, while you check later which share of those enquiries really becomes a customer.
How CPA works
Your CPA is the result of two things: what a click costs and how many visitors make an enquiry. If your CPC rises, your CPA goes up. If your conversion ratesrises, it falls. That is why a better website is often the fastest way to lower your CPA.
An example. Say a contractor who renovates bathrooms pays three euros per click on average. Of every hundred visitors, two request a quote. That is a CPA of a hundred and fifty euros. The contractor shortens the quote page, puts photos of earlier bathrooms at the top and adds a button to call straight away. After that, four out of a hundred visitors request a quote. Same click price, same budget, but the CPA halves to seventy-five euros.
It works the other way round too. If the page suddenly loads slowly on mobile after an update, or the form stops working because of a technical error, the CPA shoots up while nothing has changed in the ads. A rising CPA is therefore always a reason to check the website and the measurement first, before you start adjusting bids.
Your bidding strategy also plays a part. With a bidding strategy such as target CPA you tell Google which price per enquiry you find acceptable. The system then adjusts your bid per auction to land around that amount.
Common mistakes with CPA
Counting the wrong conversion. If your account also counts clicks on a phone number, visits to the contact page or downloaded brochures as a conversion, your CPA looks low while few real enquiries come in.
Choosing a target without doing the sums. A CPA of a hundred euros is expensive for a small repair and dirt cheap for a complete roof renovation. Without knowing your margin and your success rate, you do not know which number is good.
Treating all enquiries as equal. An enquiry for a small job and an enquiry for a new-build project count equally. If you only steer on the lowest CPA, you often attract the smallest jobs.
Only looking at the account. Google Ads sees the enquiry, but not what happens afterwards. A campaign with a high CPA may be the one that brings in the biggest jobs. Without a link to your quotes or CRM you will not see that.
Intervening too quickly. With few enquiries per week, your CPA fluctuates considerably. One expensive week says little. Look at a period of at least a few weeks before you draw conclusions.
How to approach CPA
First decide what an enquiry may cost. Take the average margin on a job and multiply it by the share of your enquiries that you turn into a signed job. If you win one in four quotes, an enquiry may cost at most a quarter of your margin per job, and preferably considerably less.
Make sure you only measure real enquiries. With good conversion tracking you count completed forms and real phone calls, and not clicks that happen to land on a button. Then link your CRM, so you can also see which enquiries became customers. With Offline conversions you send that information back to Google Ads.
Then work on both sides of the formula. Lower your click price with better ads and tight keywords. Raise your conversion rate with a page that loads fast, says clearly what you do and makes it easy to get in touch. That last part we do at conversion optimisation.
Ultimately you want to look beyond the enquiry. The best CPA is not the lowest, but the one where most enquiries end up as signed jobs with a healthy margin.
Frequently asked questions
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What is a good CPA?
A good CPA is well below what an enquiry earns you on average. Work that out with your margin per job and the percentage of enquiries you turn into a signed job. What is expensive for one business is cheap for another with bigger jobs.
Is CPA the same as cost per lead?
They are close. Cost per lead is specifically about the price of a contact enquiry. CPA is broader and can also be about a sale, appointment or other action, depending on what you have set as a conversion.
How do I lower my CPA without getting fewer enquiries?
First raise your conversion rate with a better landing page, because then the same visits bring in more enquiries. Then exclude traffic that never converts with negative keywords. That way your CPA falls while the number of enquiries stays the same or rises.
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