What is CPA?

What is CPA?
CPA, short for Cost-Per-Action, is an online advertising model to drive traffic to a website in which an advertiser pays a publisher only when the ad is clicked by a real user and the user completed a pre-defined action, calculated by dividing the total cost of the advertising campaign by the number of actions completed.

CPA, or cost per action, is a performance marketing advertising model in which marketers pay media sources a fixed amount based on a pre-specified action. This does not include deals based solely on clicks, which are referred to specifically as cost-per-click or CPC.

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.

How do I Calculate CPA?
CPA is calculated by taking the total cost of a specific advertising campaign dividing by the number of actions generated from this campaign. For example, an ad campaign that was defined as download of a special report, has generated 200 downloads and total cost was $500:

$500 divided by 200 actions (downloads) = $2.5 CPA(Cost-Per-Action)