Paul Knegten posted a simple little cost-per-acquisition (CPA) calculator that got picked up by ClickZ and is now here on their site.  If you would like to have the illusion of knowing how much a sale, sign-up, or conversion cost relative to the online advertising that “drove” it, use this tool.  I’ve used this stat many times and I find it helpful but it also poses pitfalls because it only takes into account the most proximate message that a visitor received before conversion and fails to account for any of the other factors that could have made that conversion possible.

Sometimes people see an ad for something that they were not previously aware of, they click on it, and they convert. Sometimes.

Most of the time people are touched by your marketing and PR in many ways before the moment that they actually convert. Perhaps on one occasion they read an article about you, then later a colleague who saw you a trade show recommended you, then they did a search and found your Google ad, then later they could not remember your url so they Googled you again and clicked on your organic search listing.

What if they converted after that last action? You, being a savvy marketer, would track that conversion in your analytics and you would see it as a validation of that keyword in your organic search marketing. You may even put a little check in the column in your mind for “conversions driven by organic search.” However, this customer had actually been driven by many factors that you would not be accounting for if you used this reasoning. In most cases, it is likely that similar variety of factors impacts most of your customers. In fact, if you only track conversions to the action most proximate to them, then you will most likely always find that search and email marketing are the two most productive channels at generating conversion activity…and you would be wrong in most cases.

So use your CPA data carefully. It can help you understand certain things about your online marketing strategy but it can also lead to mistaken assumptions that overlook other important awareness drivers and relationship builders that take place before the conversion moment actually happens.