ROAS, CPA, and CPC explained
ROAS, CPA, and CPC are the three most-used paid-media efficiency metrics.
| Metric | Formula | Question it answers |
|---|---|---|
| ROAS | Revenue ÷ Spend | ”How much revenue per dollar spent?” |
| CPA | Spend ÷ Conversions | ”How much does it cost to acquire a customer?” |
| CPC | Spend ÷ Clicks | ”How much per click?” |
When to use which
Section titled “When to use which”- ROAS — efficiency comparison across spend levels. Pure revenue-per-dollar.
- CPA — comparing cost per acquired customer across channels; useful when revenue per customer is roughly similar across channels.
- CPC — diagnosing whether traffic is getting more expensive (independent of conversion).
Hidden gotchas
Section titled “Hidden gotchas”- ROAS doesn’t include cost of goods. A 3× ROAS may be unprofitable if COGS is high. Use Custom costs for profit-aware metrics.
- CPA is sensitive to attribution window changes. Wider window = more conversions = lower CPA. Same spend.
- CPC moves with auction dynamics. Rising CPC across the board often reflects competitor activity, not your campaigns.