What is cost per action (CPA)?

In mobile marketing, cost per action (CPA) advertising, not to be confused with cost per acquisition advertising, 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 to calculate CPA

Cost per action formula: 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 marketing 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 advertising model.

CPC still has a higher adoption by mobile marketers due to its wide availability. Fewer ad networks offer the CPA 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 a pre-defined event has taken place to ensure they are not overcharged. Adjust provides each campaign with a unique tracker URL, and campaign performance can be assessed easily on our user-friendly dashboard, Datascape, with intuitive data visualizations for fast decision-making. Learn more about how Adjust helps advertisers accurately attribute in-app events.