Cost per action

Cost per action (CPA), also sometimes misconstrued in marketing environments as cost per acquisition, is an online advertising measurement and pricing model referring to a specified action, for example, a sale, click, or form submit (e.g., contact request, newsletter sign up, registration, etc.). Direct response advertisers often consider CPA the optimal way to buy online advertising, as an advertiser only considers the measured CPA goal as the important outcome of their activity The desired action to be performed is determined by the advertiser. In affiliate marketing, this means that advertisers only pay the affiliates for leads that result in the desired action such as a sale. This removes the risk for the advertiser because they know in advance that they will not have to pay for bad referrals, and it encourages the affiliate to send good referrals. Radio and TV stations also sometimes offer unsold inventory on a cost per action basis, but this form of advertising is most often referred to as "per inquiry". Although less common, print media will also sometimes be sold on a CPA basis. CPA is sometimes referred to as "cost per acquisition", which has to do with the fact that many actions which advertisers are optimizing towards are about acquiring something (typically new customers by making sales), although this has led to confusion in the marketing industry as to the correct meaning of CPA. Adding to the confusion, "cost per acquisition" may be used where it actually is customer acquisition cost (CAC). Cost per action (CPA) is calculated as the cost divided by the number of actions being measured. So, for example, if the spend is $150 on a campaign and the actions attributed to this campaign are 10, this would give the campaign a cost per action of $15.