Cost Per Action (CPA)

Definition of Cost Per Action (CPA)

A marketing metric that measures the cost incurred for each specific action, such as a sale or sign-up.

Explanation of Cost Per Action (CPA)

Cost Per Action (CPA) is a digital marketing metric that measures the cost of acquiring a specific action from a user, such as a purchase, sign-up, or download. This pricing model charges advertisers only when the desired action is completed, making it a cost-effective method for measuring campaign performance and ROI. For example, if an advertiser spends $500 on a campaign and acquires 50 actions, the CPA is $10 per action. CPA is beneficial for advertisers because it aligns spending directly with the results, ensuring they only pay for successful outcomes. It provides a clear understanding of the effectiveness of different marketing strategies and helps in optimizing campaigns to achieve better results. By tracking CPA, businesses can allocate their budgets more efficiently and focus on the channels and tactics that generate the highest returns.

This dictionary entry was written by

Per-Gulbrand Peter Braathen

With a foundation in doctoral-level research, Per-Gulbrand Peter Braathen is a seasoned expert in the areas of marketing, branding and communication. His proficiency extends to marketing management, branding and communication strategy. Braathen's experience is underscored by his rich background from various industries, including entertainment. A distinguished alumnus of the USC Marshall School of Business, Braathen boasts a Master of Science in Marketing, complemented by a Graduate Certificate in the Business of Entertainment from the USC School of Cinematic Arts as well as two undergraduate Bachelor degrees from the esteemed University of Southern California.