CPI vs CAC vs CPA
Three cost metrics that are often mixed up. Each prices a different step of the funnel, from the install to the paying customer.
CPI is ad spend per install, CPA is ad spend per chosen in-app action (such as a sign-up), and CAC is the total cost of winning one new customer, usually a first payment. Because each step loses users, CPI is the smallest number, CPA sits in the middle and CAC is the largest.
What is the difference between CPI, CPA and CAC?
CPI prices an install, CPA prices an action you choose, and CAC prices a customer. They are the same kind of sum (cost divided by a count) applied to three different steps of the funnel, which is why the gap between them tells you how much each step costs you.
| CPI | CPA | CAC | |
|---|---|---|---|
| Prices | One install | One chosen action (sign-up, trial, first deposit) | One new customer |
| Formula | Ad spend ÷ Installs | Ad spend ÷ Actions | Total acquisition cost ÷ New customers |
| Costs counted | Media | Media | Media, often plus creative, tools, agency and team |
| Typical use | Buying and creative tests | Campaign optimisation | Unit economics against LTV |
| Read with | Activation rate | Install-to-action rate | LTV and payback |
Customer: the user state you decide counts as acquired, usually a first payment. Writing it down is what makes CAC comparable month to month.
Which one should you optimise?
Optimise campaigns on the deepest metric that still has enough volume for the ad platform to learn from, and judge the business on CAC against LTV. In practice that means buying on CPA for a meaningful action, watching CPI for creative and inventory problems, and reporting CAC monthly.
How do the three connect?
Each metric is the one above it divided by a conversion rate:
- CPA = CPI ÷ install-to-action rate. A $2 CPI with 25% of installs signing up is an $8 cost per sign-up.
- Paid CAC = CPI ÷ install-to-customer rate. If 5% of installs become paying customers, the same $2 CPI becomes a $40 paid CAC.
- Fully loaded CAC adds the costs that are not media: creative production, agency fees, attribution and analytics tools, and the team.
That chain explains a common surprise: a channel with the cheapest CPI can have the most expensive CAC if its users rarely convert. Compare channels on the deepest metric you can measure for them.
The calculator works out all three from one set of example inputs. Change the conversion counts and watch how far apart the three numbers move.
Example inputs: change them to your own numbers. The examples only make the calculator show a worked answer; they are not benchmarks or targets. Runs in your browser; nothing you type is sent anywhere.
- CPI
- $2
- CPA (cost per sign-up)
- $8
- Paid CAC (media only)
- $40
- Fully loaded CAC
- $48
Common mix-ups
- Calling CPA "CAC". If the action is a sign-up, the figure is a cost per sign-up, not a customer acquisition cost. Most sign-ups never pay.
- Comparing paid CAC with blended CAC. Blended CAC includes organic customers who cost nothing in media, so it is always lower. Label which one you mean.
- Leaving tool costs out of CAC. Attribution, analytics and creative tools are part of acquiring customers. MMP Price Watch lists the add-ons attribution vendors charge for separately, which belong in a fully loaded CAC.
- Different windows. A 1-day CPA and a 7-day CPA for the same campaign are different numbers. Fix the window before comparing.
- Target CPA vs measured CPA. Target CPA is the bid you give an ad platform; measured CPA is what you actually paid. The two often differ.
Which number answers which question?
- Is this creative or network buying cheap installs? CPI, read with click-to-install rate.
- Is this campaign bringing users who do something? CPA on your activation or first-payment event.
- Can the business afford its growth? CAC compared with LTV, and the months to pay it back.
For short definitions, see the glossary entries for cost per install and cost per action.
Measure these by channel
The metrics in this comparison
Questions
Is CPA the same as cost per conversion?
Yes, in most ad platforms a conversion is the action you choose, so cost per conversion and CPA mean the same thing. Always name the conversion event.
Why is CAC so much higher than CPI?
Because only a small share of installs become paying customers, and CAC may include costs beyond media. Dividing by fewer users and adding more costs both push it up.
Can CPA be lower than CPI?
Only if the action happens more often than installs, for example when counting repeat actions instead of unique users. For a unique first action, CPA is always at least CPI.
Which metric should a startup report to investors?
CAC alongside LTV and payback, with a clear statement of which costs are included and what counts as a customer.
Why do tools report different values for the same metric?
Because definitions differ: what counts as active, which attribution window applies, whether organic users are included and how days are cut by timezone. Align the definition before comparing numbers.
Which currency do the calculators use?
The calculators show US dollars, but every formula works in any currency: enter your own figures in the currency you report in and read the results in that currency.
More comparisons
- ARPU vs ARPPUTwo revenue-per-user metrics that differ only in who you divide by, and that can move in opposite directions.
- LTV vs ROASLifetime value looks forward at what a user is worth; ROAS looks back at what a campaign has earned so far. Read together, they tell you when spend pays back.
- DAU/MAU vs retention rateTwo engagement measures that sound alike and answer different questions: how often active users come back, and how many new users stay at all.