Cost per action (CPA), also known as pay per action (PPA) and cost per conversion, is an online advertising pricing model where the advertiser pays for each specified action – for example, an impression, click, form submit (e.g., contact request,newsletter sign up, registration etc.), double opt-in or sale.
Direct response advertisers consider CPA the optimal way to buy online advertising, as an advertiser only pays for the ad when the desired action has occurred. The desired action to be performed is determined by the advertiser. Radio and TV stationsalso sometimes offer unsold inventory on a cost per action basis, butthis form of advertising is most often referred to as “per inquiry”.Although less common, print media will also sometimes be sold on a CPAbasis.
What is 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 .
Now let’s compare affiliate marketing with CPA marketing. First ofall, what does CPA stand for? It’s Cost Per Action, or sometimes CostPer Acquisition.
CPA is available for just about anything, the same way as affiliate marketing. You can find it for a variety of products and services, in a wide range of niches.
One difference between affiliate marketing and CPA is that usuallyaffiliate marketing comes from the manufacturer or seller of theproducts. CPA, on the other hand, comes from networks with a range ofoffers from various sellers, more like a marketplace than a singlestore. Becoming a part of, say, Joe Blow’s Affiliate Shack gives youaccess to just what Joe Blow sells. Becoming a part of a CPA network can give you access to a lot of different offers from various manufacturers in different niches.
CPA also doesn’t rely on a sale. You still have the same customer – CPA – seller layout, but instead ofrequiring a sale to get paid, you can get paid for other actions. Theymight be form fills, or email submissions, or sales calls, or ebookdownloads, or app installs, anything else the seller wants. Essentially, you’re being absolved of the need to sell. Instead, all you need to dois hook the customer up with the sales people of the seller. Some CPAoffers will give you a bonus if the sale happens, while most just payyou for the lead.
If all of this sounds an awful lot like affiliate marketing, well, you’ve found out the dirty secret of the industry. CPA marketing is a subdivision of affiliate marketing, with a slightly different framework and a different process.
Which Should You Use?
So, the debate between affiliate marketing and CPA marketing is often one that comes down to the simple choice of which you should use tomake money. Which is easier? Which earns you more?
The fact is, there are so many affiliates and so many CPA networksout there, with so many products and so many offers to pick through,that it’s impossible to recommend any one system, network or productabove all others. Even the best high-converting offer earns you nothingif your site is terrible and you can’t sell. Conversely, you can make aton of money out of bland, low-payout offers with a great site and alow-competition niche.
Here’s the thing; you can do both. In fact, you very likely should do both. If you design your site properly, and you integrate your ads into yourcontent with appropriate disclosure, you can do very well.
Someone coming to your site might be looking for something somewhatrelated to the products you offer. If you’re limited to just affiliatemarketing, you lose the conversion, because the items you have on offeraren’t exactly what the user wants. If you have a few CPA offersscattered throughout, however, then the user can contact various sellers to ask about a product that meets their needs. Rather than a bounce,you get paid for a lead.
One benefit of affiliate marketing is the lack of human contactnecessary to be successful. I can easily write dozens of blog posts with affiliate links peppered in, and make money from people clickingthrough. I don’t need to talk to anyone at the seller, I don’t need tobe a pushy salesman directly to the customer, I just set it up and makemoney.
CPA networks, meanwhile, often require an interview process before you can get started. This means at a minimum that you need to be in contact with the manager of the CPA network.
On the other hand, you can be successful with CPA without a website.You can run successful CPA ads on Facebook, for example, without needing a landing page and a website between the user and the seller. You justneed to know your audience, know your niche, and have plenty to spend on ads.
When you bring both methods together, that’s when moneymaking harmony sings. Design a nice site in a good niche, run CPA offers and affiliate links, and make money from a dozen different sources at once.