What each sale, lead or sign-up cost you in advertising, and whether the campaign paid for itself.
Cost per acquisition (CPA)
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Enter the ad spend and the conversions to see the CPA.
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Enter what a campaign cost and the conversions it brought over the same period: sales, leads, sign-ups. You get your cost per acquisition (CPA) to the penny, with every step of the working. Add the clicks to see the cost per click and the conversion rate; add the average value of a conversion and your gross margin to see the highest CPA you can afford, and a target CPA to see how far you are from it.
Take the ad spend and the conversions from the same campaign and the same dates. Google Ads calls the result cost per conversion ('Cost / conv.'): total cost divided by the number in the Conversions column. It reports each conversion against the day of the click, so a sale made this week after a click last week counts towards last week, with the cost of that click.
Use what the advertising really costs your business. If you are VAT-registered, you can reclaim the VAT on what you buy for the business, so take the amount excluding VAT; if you are not registered, the VAT you pay is part of the cost, so take the amount including VAT. The value of a conversion follows the same logic: excluding VAT if you charge VAT to your customers.
Under data-driven attribution, Google Ads splits the credit for a conversion between several clicks, so the Conversions column can show figures such as 12.50. Enter them as they are: the calculator takes conversions to two decimal places.
The break-even CPA is what a conversion leaves you before advertising: its average value times your gross margin, as a percentage of the selling price. Pay more than that per conversion and each one loses money. The target CPA is the average you aim for, such as the one you set for Target CPA bidding in Google Ads; the calculator gives the difference, and how many conversions the same spend would need to meet it.
Money is rounded to the nearest penny and the conversion rate to the nearest hundredth of a percentage point, with halves rounded up. The margins and the difference from your target start from the figures shown, so you can check every line of the working by hand. Whether you meet your target is judged on the CPA before rounding, so it always agrees with the conversions needed.
CPA = ad spend ÷ conversions.
Cost per click = ad spend ÷ clicks; conversion rate = conversions ÷ clicks × 100. So the CPA is also the cost per click divided by the conversion rate written as a decimal (3% = 0.03).
Break-even CPA = average value of a conversion × gross margin.
Margin per conversion after ad spend = break-even CPA − CPA; campaign margin = break-even CPA × conversions − ad spend.
Conversions to hit a target CPA = ad spend ÷ target CPA, rounded up to a whole number, or to the hundredth if your conversions have decimals.
A campaign cost £1,800.00 excluding VAT and brought 90 sales from 3,000 clicks. The CPA is £1,800.00 ÷ 90 = £20.00, the cost per click £0.60 and the conversion rate 3%. An average sale is worth £60.00 with a 30% gross margin, so the break-even CPA is £60.00 × 30% = £18.00. Each sale therefore cost £2.00 more in advertising than it left in margin, and the campaign lost £180.00 after ad spend. Against a target CPA of £15.00, the CPA is £5.00 too high: to meet the target, the same £1,800.00 would have had to bring 120 sales.
Divide the ad spend by the number of conversions over the same period: £500 spent for 50 conversions gives a CPA of £10. If you know the cost per click and the conversion rate instead, divide one by the other: at £0.50 a click and a 5% conversion rate, a conversion costs £0.50 ÷ 0.05 = £10.
CPA usually measures one campaign or channel: the advertising cost of a conversion, which may be a lead or a sign-up rather than a customer. Customer acquisition cost divides every sales and marketing cost, salaries included, by the new customers won. A campaign can have a low CPA while the business has a high CAC.
One below your break-even CPA, the margin a conversion leaves you before advertising. No official body publishes benchmarks, and the averages quoted online mix very different sectors. If a conversion is a lead rather than a sale, multiply the value of a sale by the share of leads that become customers to get the value of a lead.
If you count every conversion after a click, or track several conversion actions, one click can bring more than one conversion, and Google Ads says the rate can then be over 100%. The CPA is still right; the calculator points it out so that you can check both figures cover the same campaign.
Use the amount that is really a cost to your business. A VAT-registered business can reclaim, in its VAT return, the VAT on what it buys for the business, so it takes the amount excluding VAT. A business that is not registered cannot, so the VAT it pays is part of the cost.
Google Ads reports conversions against the day of the click, can split a conversion between several clicks, and counts in its cost per conversion only the interactions whose conversions it can track. Your own figures, from your shop or your sales system, count sales on the day they happen. Both are right: compare like with like, over the same dates.
This calculator gives general information, not legal, tax, financial or accounting advice. The result depends on the spend and the conversions you count: check that they cover the same campaign and the same period.
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