What is cost per action (CPA)?

In mobile marketing, cost per action (CPA), sometimes referred to as cost per acquisition, is a cost model where the app advertiser pays the ad publisher a fixed rate when a user completes a predefined post-install event, such as a purchase or registration.

How is cost per action calculated?

To calculate CPA, simply divide the total advertising cost by the number of times the pre-defined event occurred.

A ‘good’ CPA is relatively subjective, as it will depend on your app’s vertical and campaign’s KPIs. However, as a rule of thumb, your campaign should acquire users at a profitable price. This means your average revenue per user (ARPU) should exceed the CPA.

Oftentimes, marketers may wonder whether they should select CPA or cost per click (CPC) as their advertising cost model. However, this will depend on the goal of your campaign. If you’re looking to measure engagement with an ad when you’re running a campaign further up the funnel, you may wish to consider CPC, which pays the ad publisher a fixed rate when a user clicks on an ad. However, if you need to measure what a user is doing after installing your app, particularly if your KPI is centered around the revenue a user is producing, you’ll want to use the CPA model.

CPC still has a higher adoption by mobile marketers due to its wide availability. Fewer ad networks offer the CPA pricing model as they bear the risk of a campaign with a low conversion rate, resulting in minimal profit from the inventory they have already paid upfront for.

Advertisers rely on attribution tools like Adjust to verify when the pre-defined event has taken place so that they are not overcharged. Adjust provides each campaign with a unique tracker URL, and campaign performance can be assessed easily on our simple, user-friendly dashboard. Learn more about how Adjust helps advertisers accurately attribute in-app events.