What is Cost Per Purchase?

Cost Per Purchase (CPP), generally called cost per order, is a marketing metric that calculates the cost of acquiring a genuine user by dividing the total cost of a marketing campaign (cost of media spend, user acquisition, promotions, marketing, etc.) by the number of purchases made. With CPP, businesses can measure a marketing campaign's efficiency in terms of how much it costs to make a sale, how popular its products are, and how much users spend.

Why is CPP important?

Buyers are more likely to consider the cost per unit when purchasing. If one of your products is significantly more expensive than the others, the chances of it being purchased decline. To ensure competitive pricing across all items, offering a range of cost options is crucial. This allows customers to select the cost that suits them best.

For instance, if you have five products priced at $10, $15, $20, $25, and $30, your customers can freely choose their preferred price range. Instead of buying several products at one price point, they may only select a few options with more balanced cost ranges.

How to calculate CPP?

Infographic of Cost per purchase formula says "Cost per purchase = Total cost of the campaign / Total number of new users acquired from the campaign"

A practical example to calculate cost per purchase

Suppose you want to calculate the CPP for a month in which you acquired 200 users. Now, let’s assume that the following are your total costs:

App market research$300
Ad campaigns$900
ASO$400
Branding$1200
Total cost$2800

Hence, the CPP here will be calculated as below:
$2,800/200 = $14 (CPP)

Are you interested in running Cost Per Purchase (CPP) campaigns?

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info@greedygame.com
India Office
GreedyGame Media Private Limited,
4th Floor, No.04, Zed Pentagon,
Hosur Main Road, Bommanahalli,
Bengaluru 560068 Karnataka
USA Office
GreedyGame Inc.
2093 Philadelphia Pike,
#2346, Claymont,
State of Delaware 19703
© GreedyGame Media Pvt. Ltd. 2023. All Rights Reserved.