Cost Per Acquisition (CPA)

Cost Per Acquisition (CPA) is a marketing metric used to measure the cost incurred to acquire a new customer. It is calculated by dividing the total cost of a marketing campaign by the number of customers acquired through that campaign. CPA is an essential metric in digital marketing, in mobile marketing campaigns and Apple Search Ads.

Apple Search Ads is an advertising platform that helps app developers acquire new customers on the App Store. With Apple Search Ads, advertisers can promote their apps to potential customers searching for apps using specific keywords. CPA is an important metric in Apple Search Ads because it helps advertisers measure the effectiveness of their campaigns and optimize their marketing efforts.

You can set a CPA goal at the ad group level in Apple Search Ads search results campaigns. This would be the amount you’d like to pay for a conversion.

CPA is important because it helps advertisers understand the cost of acquiring a new customer and make informed decisions about optimizing their campaigns and costs. By calculating the CPA, advertisers can determine the return on investment (ROI) of their marketing campaigns and allocate their resources to the most effective channels.

A good cost per acquisition depends on the industry, the marketing channels used, and the target audience. Industry benchmarks suggest that a CPA should be 2-3 times lower than the customer acquisition cost (CAC) to ensure profitability. In addition, a good CPA should be 2-4 times lower than the customer lifetime value (CLV) to ensure a positive ROI. However, a good CPA also depends on the competition in a specific mobile marketing category, the company's goals, budget and more.

According to SplitMetrics’ Apple Search Ads Search Results Benchmarks Report, the average CPA across various categories was $3.21 in H2 2022

To calculate CPA, you need to divide the total cost of the advertising campaign by the number of customers acquired through that campaign.

Сost Per Acquisition Formula

CPA = Total Cost / Customers Acquired

CPA in Apple Search Ads Formula

CPA = Spend / Downloads

CPA in Apple Search Ads is the indicator to measure how much on average the conversion — install — costs. Average CPA is calculated by dividing the total spend by the number of installs from an ad in Apple Search Ads within a specific time frame.

Cost Per Acquisition Example

Suppose an ad campaign in Apple Search Ads cost a mobile developer $10000, and it generated 3000 new downloads. Then the CPA would be:

CPA = $10000 / 3000 = $3.33

This means that the cost per acquiring one user is $3.33.

Tracking CPA is important to understand the performance of a mobile marketing campaign and optimize its cost-effectiveness. To track CPA, mobile developers and marketers can use tools, such as SplitMetrics Acquire – Apple Search Ads automation and optimization platform. SplitMetrics is an Apple Search Ads Partner.

By measuring the CPA over a relatively short period, marketers can adjust their campaigns to achieve the highest ad rank and lower the cost per acquisition.

Marketers focus on decreasing the CPA by optimizing their marketing campaigns to get conversions and acquire customers more efficiently. Here are some ways to decrease CPA in Apple Search Ads:

1. Improve your TTR and CVR. Optimize your product page creatives and use relevant keywords your target audience is searching for and include them in your Apple Search Ads campaigns.
2. Take advantage of ad variations using custom product pages (CPP). Use custom product pages to target users more effectively by showing them specific creatives and messages as ad variation in search results campaigns.
3. Leverage the CPP Intelligence solution in SplitMetrics Acquire.
4. Use automation rules in SplitMetrics Acquire. Automatically increase bids for top-converting keywords or vice versa, decrease bids or even pause ill-performing keywords, thus optimizing CPA.
5. Increase revenue impact: acquiring new users is just the first step. By increasing the lifetime value (LTV) of each user, mobile marketers can increase ROI, ROAS and decrease CPA.

Check out how Spark Networks reduced CPA and increased ROAS with SplitMetrics.

The cost per acquisition (CPA) is a crucial marketing metric for mobile marketing campaigns, especially in Apple Search Ads. It helps marketers determine the effectiveness of their ad campaigns and make informed decisions on how to optimize their marketing efforts. By calculating CPA in Apple Search Ads and comparing it to the industry benchmarks, mobile marketers can evaluate the profitability of their campaigns, optimize them and adjust their spend accordingly.