The average amount spent to generate one new customer or another defined acquisition outcome.
A measure used to evaluate whether marketing growth is financially sustainable.
Short and sweet:
The average amount spent to generate one new customer or another defined acquisition outcome.
A measure used to evaluate whether marketing growth is financially sustainable.
Cost per acquisition is often used specifically at the campaign or channel level, tracking exactly how much a single paid channel spent to generate one new customer, which makes it useful for comparing the efficiency of one ad platform or campaign directly against another. Because it’s calculated per channel, a business can see clearly that one platform is producing cheaper acquisitions than another, informing where additional budget should realistically go next. Marketers watch this figure closely alongside lifetime value, since a channel with a low cost per acquisition that also attracts low-value customers may not actually be the bargain it first appears to be.
A mobile game studio might track cost per acquisition for app installs, discovering it costs $2 to get someone to download the game through a TikTok ad campaign.
An insurance company evaluating its marketing spend might calculate this same figure for a new policyholder, comparing whether Google Ads or direct mail brings in customers more cheaply.
A nonprofit tracking this number for a new recurring donor might find that a Facebook fundraising campaign brings in supporters far more affordably than a direct mail piece.
