Cost Per Sale (CPS)

Definition of Cost Per Sale (CPS)

The cost incurred for generating a sale, calculated by dividing total advertising cost by the number of sales.

Explanation of Cost Per Sale (CPS)

Cost Per Sale (CPS) is a performance-based pricing model in digital marketing where advertisers pay only when a sale is made. This metric helps businesses understand the cost associated with acquiring a single sale through their marketing efforts. For example, if a company spends $1,000 on a campaign and generates 100 sales, the CPS is $10. CPS is an essential metric for evaluating the effectiveness and profitability of marketing campaigns. It allows advertisers to measure the direct impact of their efforts on sales and make data-driven decisions to optimize their strategies. By focusing on CPS, businesses can ensure they are maximizing their return on investment and driving sustainable growth. This model is particularly beneficial for e-commerce and retail businesses where sales are the primary goal.

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.