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| Page: Definition CPA |
CPA (Cost per Action):
CPA goes one step further than CPC (Cost per Click) or PPC (Pay per Click). In a CPC/PPC campaign the advertiser has to pay whenever a user clicks on his ad and is directed to his website . Whether this user stays on the website for some time, buys something, submits his email address in an opt-in form or leaves right away without having taken any action has no effect on the CPC.
In CPA campaigns the
advertiser is only charged when the visitor performs a specific
action. This can mean as little as submitting his ZIP code or
as much as filling out a whole credit application form with all
required personal data or purchasing a product. Therefore CPA
advertising is also called performance based
advertising.
Correspondingly the cost
for the action can vary from $1 or less to $50 –
100.
In a CPA campaign there is
an advertiser who provides the offer, for example a credit card
company who offers to pay $50 for each fully completed credit
card application form. Then there is a publisher who agrees to
take care of the promotion to drive traffic to the advertisers
application form page. For every referred user who fills out
the form the publisher receives the
$50.
Obviously running a
CPA campaign is very similar to running an affiliate
program. The only
difference is that in case of an affiliate the “action”
he gets paid for is a sale whereas for a CPA publisher –
depending on the nature of the campaign – the desired
action might only be that a user submits some of his
personal data.
For a publisher the
way of choice to drive traffic to the CPA offer is PPC
advertisement. To optimize a site to rank high in the
organic search
results is possible but
can take several months and many CPA offers run only for a
limited time. So when the site had finally made it to a decent
position in the SERPs the offer it promoted could have been
pulled off already. A CPA offer could also be promoted by email
but many advertisers do not allow this for fear of being pulled
into spam-troubles by their
publishers.
A profitable PPC campaign would then mean that the publisher makes more money from his CPA commissions than he spends for advertisements. This sounds easy, especially considering that there are CPA offers that pay up to $100. But these are in very competitive markets where also PPC costs are in the range of several dollars.
Hence a lot of money can be made in the CPA business but only with sufficient know-how on how to pick profitable offers and how to create a highly converting PPC campaign. For more information see under CPA Network.
[Cost is from Latin constare = to be fixed, to cost;
Action is from Latin actionem – agere = to do]
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