Cost per acquisition (CPA) is a metric that quantifies the average expense a company incurs to acquire a new customer or lead. It helps guide businesses in evaluating the effectiveness and efficiency of their marketing campaigns and channels. By calculating the total cost of marketing efforts and dividing it by the number of acquired customers or conversions, CPA provides a tangible measure of how much each new customer or lead "costs" the company.

Formula for cost per acquisition: CPA = Total marketing costs / Number of new customers

CPA is an important tool that helps companies account for every dollar and make data-driven decisions to optimize their maximum return on investment (ROI). By analyzing CPA across different campaigns, channels and customer segments, companies can identify which tactics are most cost-effective in generating leads and driving conversions. This allows them to allocate resources more efficiently, prioritize high-performing channels and refine their messaging to resonate with their target audience.