We miss this KPI so often, but it is so important! It’s not ROI, CTR, ACoS, or even TACoS.

The Hidden Gem is the Cost Per Acquisition (CPA) metric. On Amazon, it is often known as Cost-per-sale.

What is CPA?

CPA is the average cost spent to acquire a new customer or generate a lead through an Amazon PPC campaign. It provides insights into the efficiency of your ads efforts by measuring the expenses associated with acquiring a customer. By analyzing CPA, you can make data-driven decisions for future campaigns.

But why is CPA so important?

Understanding CPA is crucial because it allows you to measure the results of your campaigns accurately. In fact, you can track it only for PPC, so you will understand the cost per 1 PPC sale. Or as an overall CPA that shows you how much money you spend to get 1 sale.

By comparing the CPA against the customer lifetime value (CLV), you will also identify optimization areas and plan your budgets efficiently.

In short, the top 3 benefits of CPA are:

• Insightful Performance Measurement CPA allows you to gauge your ads’ success and optimize your strategies accordingly.

• Enhanced Budget Allocation By knowing the cost associated with acquiring customers, you can plan your ads budgets wisely, maximizing the ROI.

• Optimization Opportunities Analyzing CPA provides insights into which campaigns, or keywords perform well. It helps you to focus on what works and where to optimize your efforts.

How to calculate your CPA?

The simple formula is to divide Total Cost by Total Conversions (CPA = Total Cost / Total Conversions).

Next time you evaluate your marketing campaigns, remember to consider the Cost Per Acquisition (CPA) metric. It could be the key to unlocking your business’s true potential.