Online advertising
payment model in which payment is based solely on qualifying actions such as
sales or registrations.
Information
The actions defined
in a cost-per-action agreement relate directly to some type of conversion, with
sales and registrations among the most common. This does not include deals
based solely on clicks, which are referred to specifically as cost-per-click or
CPC.
The cost-per-action
(CPA) model is at the other end of the spectrum from the cost-per-impressions
model (CPM), with the cost-per-click (CPC) model somewhere in the middle. In a
CPA model, the publisher is taking most of the advertising risk, as their commissions
are dependant on good conversion rates from the advertiser’s creative units and
Web site.
Marketers looking
for cost-per-action deals have several options. Publishers with considerable
excess inventory may be willing to consider nonstandard offers. Sites
specializing in incentive programs are in a position to offer CPA pricing on
various types of leads, although the usual caveats concerning incentivized
traffic still apply. Perhaps the most widespread use of performance-based
pricing is affiliate marketing, whereby merchants/advertisers determine what
actions they want to reward and how much they are willing to pay.
Why CPA?
There are two main
reasons that I prefer CPA over banner ads, Adsense, and most other affiliate
marketing strategies.
1. Higher on the Value Chain
To make the most
money from your site, you want to get high up on the value chain.
CPA
Cost per acquisition (CPA), also referred to as
“Cost per action” is an online advertising costing model where the advertiser
pays for a specified acquisition. An acquisition can be described as a sale,
lead, sign up or form submission (e.g. contact request, newsletter sign up,
registration etc...). The way in which the acquisition is tracked is when a
user clicks a specific action button — for example if a customer signs up for
an advertiser’s service, once they click the “submit” button, that click is
considered as an acquisition because the user clicking onto that button
represents a real lead for the advertiser.
Methods of CPA Promotion
There are many differing ways to promote CPA
campaigns, some of which involve having your own website, some that don't. The
truth is that CPA marketing is really not all that different than other types
of marketing. At it's most basic you just have to take some time to consider
the product that you are promoting and where you will actually find a market
that is interested in either learning more or purchasing a product.
Having said all of that I will list a few
examples of the more popular CPA promotional methods that you may come across:
Review Website –
Generally these types of websites will contain three of more products
within a certain niche i.e. Weight Loss Pills or Lawn Fertilizer. They
will then give you a brief introduction to each product, a review of the
products performance and then usually a star rating out of five. Each of
these products will usually be ranked in order and all will contain links
to either a personalized landing page (introduced below) or direct to the
merchant.
Sales/Landing Page – This
site is usually more of a direct sales page and will likely introduce a
lot more information on the product that it discusses. It will typically
be a very hard sale and work to get it's reader either clicking through to
the merchant there and then or at the very least signed up to the site
owners mailing list. Some sales pages will actually try to do both of
these things, though it can often be beneficial to have one direct path
through a landing page. Too many options can ultimately mean losing
clicks.
Splash Page – This is
usally content light and will have flashy graphics with some punchy
headlines and copy to encourage readers to input their details or
click through to the merchant. Product information is usually minimal and
these types of pages are often reserved for products that need little
explanation or are already famous i.e. competition for an iPhone or
Macbook.
Quiz / Fun Landing Page – Similar to
the spash page but even simpler. There will usually be a question with two
or more answers that can then be clicked on through huge domineering
buttons. Sometimes some sort of game may be used in page of this style and
it is definitely not the kind of page that someone will be revisiting.
It's only purpose is to get that click-through and get it now.
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