What is Cost Per Action (CPA)?

Cost Per Action (CPA) is a performance-based pricing model where advertisers only pay when a user completes a specific action after engaging with an ad. Unlike Cost Per Click (CPC) or Cost Per Mille (CPM), CPA ensures that ad spend is directly tied to conversions, making it a high-efficiency model for businesses focused on measurable outcomes.

CPA is commonly used in programmatic advertising to optimize ad spend toward actions that drive revenue—such as a purchase, registration, or demo request—rather than just impressions or clicks.

How to Calculate CPA

To determine your CPA, use this formula:

Total ad spend divided by the number of completed actions

For example, if an advertiser spends $5,000 on a campaign and 500 users complete the target action, the CPA is:

$5,000 ÷ 500 = $10 per action

This calculation helps marketers measure cost efficiency and align ad spend with business goals—ensuring that customer acquisition costs remain profitable.

CPA vs. CPC

CPC (Cost Per Click) is ideal for driving traffic and brand awareness, as advertisers pay per click, regardless of conversions. CPA (Cost Per Action), on the other hand, ensures payment only when a user completes a desired action, making it a better choice for performance-driven campaigns focused on ROI. While CPA typically has a higher cost per unit, it delivers guaranteed results, whereas CPC may require a larger budget to achieve the same level of conversions. If profitability is the priority, CPA is the smarter choice for maximizing efficiency.