What is the difference between CPA and ROAS?
An example of an AI chatbot conversation about understanding CPA and ROAS in digital marketing.
What is the difference between CPA and ROAS?
CPA stands for Cost Per Acquisition, which measures the cost to acquire a customer. ROAS, or Return on Ad Spend, measures the revenue generated for every dollar spent on advertising.
How do I calculate CPA?
To calculate CPA, divide the total cost of your advertising by the number of conversions. For example, if you spent $100 and gained 10 customers, your CPA would be $10.
And how about ROAS?
ROAS is calculated by dividing the revenue generated from ads by the total ad spend. If you earned $500 from a $100 ad spend, your ROAS would be 5, meaning you earn $5 for every $1 spent.
Which metric should I focus on for my campaigns?
It depends on your goals. If you're focused on acquiring customers efficiently, CPA is key. If you're looking at overall revenue from ads, then ROAS is more relevant.
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