Metrics & Economics
CPA (Cost Per Acquisition)
The total ad cost to acquire one customer or conversion.
$25–$60
DTC median CPA
$36
Break-even at $80 AOV / 45% CM
CPA is the metric that decides whether a bid strategy is 'working.' But CPA in isolation is meaningless — it needs to be compared to break-even CPA, which is driven by AOV and contribution margin.
Definition
CPA is total ad spend divided by the number of conversions attributed to that spend — the cost the business pays for each new customer or lead.
Why it matters
CPA against contribution margin decides whether a campaign is profitable, break-even, or a slow bleed.
Formula
CPA = Ad Spend ÷ Conversions
Break-even CPA
Break-even CPA = AOV × contribution margin %. At $80 AOV and 45% margin, break-even is $36 CPA. That's the ceiling above which the campaign loses money on the first order — before considering LTV.
CPA vs CAC vs CPL
Worked example
$4,000 spend for 80 purchases = $50 CPA.
Common mistakes
- ✕Judging CPA without knowing break-even CPA.
- ✕Comparing across attribution windows.
- ✕Optimising to CPA on top-funnel campaigns.
Frequently asked questions
CPA counts every conversion — new and repeat. CAC counts only newly acquired customers, so CAC is usually higher than CPA.
Whatever is below your break-even CPA (AOV × margin %). Below that, the campaign contributes profit. Above it, you're betting on LTV.