Cost Per Acquisition (CPA)

Cost per acquisition (also called cost per conversion) is the average amount you spend on Google Ads to acquire one conversion, whether that’s a lead, sale, or other defined action. CPA is calculated by dividing total ad spend by the number of conversions. This metric matters more than CPC because it measures actual business results, not just clicks.

Target CPA is also a Smart Bidding strategy where you tell Google your desired cost per conversion and the algorithm automatically adjusts bids to hit that target. Google recommends having at least 30 conversions in the past 30 days for Target CPA to perform well. For service businesses, tracking CPA all the way to actual customers (not just leads) reveals true acquisition costs.

Example: A healthcare practice spends $3,000 monthly on Google Ads and generates 40 appointment requests, resulting in a $75 CPA. However, only 25 patients actually show up, making their true cost per new patient $120.