What does cost per acquisition (CPA) help advertisers assess?

Cost per acquisition (CPA) is a critical metric for advertisers as it specifically measures the effectiveness of campaigns in acquiring new customers. By calculating the CPA, advertisers can determine how much they are spending on marketing efforts for each successful customer acquisition. This insight enables them to evaluate how well their advertising strategies are performing in terms of converting potential customers into actual buyers.

When the CPA is low, it typically indicates that a campaign is effective, allowing for greater returns on advertising spend. In contrast, a high CPA may suggest inefficiencies that need to be addressed. This metric helps in optimizing campaign strategies to improve conversion rates and increase profitability.

Other options, while relevant to advertising metrics, do not specifically align with the purpose of CPA. For instance, assessing total revenue generated from ads relates more to return on investment (ROI), measuring overall financial performance rather than individual customer acquisition efficiency. Similarly, demographic reach focuses on audience targeting rather than the cost-effectiveness of converting that audience into customers. Lastly, the duration of a campaign pertains to time management and scheduling rather than the financial aspect of acquiring customers. Thus, CPA's direct association with evaluating campaign effectiveness in customer acquisition makes it a vital metric in digital advertising.