Consider a fitness app company running a Meta Ads campaign to encourage users to sign up for a premium subscription. The company spends $1,200 on the campaign, which results in 300 new premium subscriptions.
CPA (Cost Per Action) in this context refers to the cost per premium subscription.
CPA = Total Cost of Campaign / Number of Actions (Premium Subscriptions)
CPA = $1,200 / 300
CPA = $4
This means the company spent $4 for each premium subscription acquired through the Meta Ads campaign. By analyzing this metric, the company can evaluate the effectiveness of their advertising strategy and optimize their budget allocation for future campaigns.