CPA Formula: How to Calculate Cost per Acquisition

Cost per acquisition (CPA) formula

CPA = Total ad spend ÷ Number of acquisitions (the defined conversion action)

• Ad spend: Media cost for the campaigns and period being measured.
• Acquisitions: Count of the specific action you are paying for: leads, booked calls, signed contracts or purchases. Name it every time you report CPA.

How to calculate cost per acquisition (CPA) in Excel and Google Sheets

Excel, using the cells in the worked example below:

=SUM(B2:B4)/SUM(D2:D4)

Worked example

A residential solar installer runs three lead sources and wants cost per lead and cost per signed contract to reallocate next quarter's budget.

1. Total spend = $47,000; total leads = 805; total contracts = 45.
2. CPA per signed contract = 47,000 ÷ 45 = $1,044.44.
3. Cost per lead = 47,000 ÷ 805 = $58.39. Meta looks cheapest per lead ($38.05).
4. Per contract (=B2/D2 filled down): Google $800, Meta $1,200, radio $2,250. Meta's cheaper leads close at 3.2% versus Google's 8.8%.

Result: $1,044.44 CPA per signed contract

How to interpret cost per acquisition (CPA)

CPA is only as useful as the action it counts. Cost per lead rewards cheap, low-quality leads; cost per sale or signed contract reflects what the business needs. Set a target CPA from economics: the gross profit of an average sale (or the lifetime value of a customer) caps what you can pay. If an installed system yields $4,000 of gross profit, a $1,044 CPA leaves room, while radio at $2,250 per contract is borderline once sales salaries are added.

Common mistakes

• Optimising campaigns on cost per lead when lead quality varies by source. Track CPA to the revenue event.
• Changing the conversion definition mid-quarter, which makes CPA trends meaningless.
• Attributing contracts with long sales cycles to the month they closed, while spend sits in earlier months.
• Excluding the cost of handling leads. Sales time spent on poor leads is real cost; that's what fully loaded CAC captures.

Calculate cost per acquisition (CPA) with Better Analyst

Connect your data or upload a spreadsheet, then ask in plain English. Better Analyst writes and runs the calculation and shows the steps, so you can check the number.

• “Calculate cost per lead and cost per signed contract by source for last quarter.”
• “Which campaigns have a cost per lead below average but a cost per sale above average?”
• “Set up a weekly report of CPA by channel sent to Slack every Monday.”

Usually calculated from: Google Sheets, Airtable, Google Analytics, Google BigQuery, PostgreSQL.

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Further reading

• Customer acquisition cost formula
• ROAS formula
• Connect Airtable
• Scheduled tasks
• Better Analyst for agencies