Overview
CPA, or cost per acquisition, is the average cost to win one paying customer or order. It is calculated as total spend divided by the number of conversions.
It is the cost side of your unit economics: how much you pay to get a sale, which you then weigh against what that sale is worth.
How it works
If you spend $1,000 and get 50 orders, your CPA is $20. On TikTok Shop, CPA includes ad spend and can be extended to include commission and sampling cost to reflect the true cost of an acquired sale.
Why it matters
CPA only makes sense next to average order value and margin. A $20 CPA is great on a $90 order with healthy margin and terrible on a $25 order. It is the number you protect to keep the channel profitable.
How brands use it
Brands set a target CPA from their margin and AOV, then scale the creators and placements that come in under it and rework the ones that do not.
