If you’ve spent any time running Google Ads, you’ve probably heard two important metrics tossed around: CPA and ROAS.
Both are ways to measure performance. Both are used in bidding strategies. And both can be confusing when you’re just starting out. So which one should you use for your campaigns?
Let’s break it down.
What Is CPA? (Cost Per Acquisition)
CPA (Cost Per Acquisition) tells you how much it costs, on average, to get one conversion.
Example: If you spend $500 on ads and get 10 conversions, your CPA is $50.
Conversions can mean different things depending on your business: a sale, a form submission, a phone call, or a signup.
CPA is best when you care about volume of leads or sales, not necessarily the profit margin of each.
What Is ROAS? (Return on Ad Spend)
ROAS (Return on Ad Spend) tells you how much revenue you get for every dollar you spend on ads.
Example: If you spend $500 and make $2,000 in sales, your ROAS is 4 (or 400%).
Unlike CPA, ROAS looks at value, not just cost per conversion.
ROAS is best for e-commerce and businesses where sales values vary.
CPA vs ROAS: The Key Difference
The main difference is what you’re optimizing for:
CPA = Focuses on cost per conversion. Great if every conversion is worth about the same.
ROAS = Focuses on revenue compared to ad spend. Great if conversion values vary (like product prices).
When to Use CPA
CPA is ideal when:
You’re running lead generation campaigns.
Each lead or customer has a similar lifetime value.
You want to maximize volume of conversions.
Example: A dentist may pay $40 per new patient lead. As long as CPA stays under $40, the campaign is profitable.
When to Use ROAS
ROAS is ideal when:
You’re selling products online with different price points.
You want to measure profitability, not just conversions.
You want to scale campaigns based on return.
Example: An e-commerce store sells items from $10 to $500. A $20 CPA might be fine for a $500 item but not for a $10 item. ROAS gives the full picture.
Which One Should You Use?
The answer depends on your business model:
Lead generation or service businesses → CPA is usually more practical.
E-commerce businesses → ROAS is usually the smarter choice.
Hybrid businesses → Track both, but pick one as your primary KPI.
A good rule of thumb:
Start with CPA if your conversion values are the same.
Move to ROAS if your conversion values differ and you need to understand profitability.
Final Thoughts
Both CPA and ROAS are valuable — but they tell different stories.
CPA shows you how much you’re paying for conversions.
ROAS shows you how much money those conversions are bringing back.
The smartest advertisers don’t choose blindly — they align their metric with their business goals.
If you know your customer value and profit margins, ROAS often gives a deeper picture. But if your goal is simply to get as many leads or customers as possible, CPA is the way to go.