Target Cost Per Acquisition (tCPA)

What is it?

Target CPA bidding allows advertisers on platforms like Google Ads and Facebook to set a maximum cost they are willing to pay for each new customer acquisition from their ad campaigns. Rather than focus only on clicks or impressions, Target CPA prioritizes conversions.

How it works?

With Target CPA, the platform automatically adjusts bid amounts up or down based on a campaign’s recorded cost-per-acquisition (CPA). The goal is to efficiently reach the target CPA set by the advertiser while maximizing the volume of new customer conversions.

Calculation

CPA itself is calculated by taking the total cost spent on an ad campaign and dividing it by the number of conversions (i.e. website signups, app downloads, etc.). For instance, if a $1,000 campaign generated 100 conversions, its CPA would be $10 ($1,000/100 conversions). Target CPA bidding aims to keep the CPA right around or below the targeted amount.