CPA marketing, or cost per action marketing, is a type of affiliate marketing that provides a particular affiliate with a commission every time they get an individual to complete a certain action. Sometimes, this model is also known as the cost per acquisition marketing model.
Through this marketing model, affiliates would encourage leads or prospects to purchase a product, watch or view certain media, answer a survey, or provide pieces of information. Sales and registrations are two of the most common types of conversions in CPA marketing. The “action” is also considered as a conversion, as it transforms a site visitor into a lead or a customer.
Who Is Involved in the CPA Marketing Model?
The cost per action marketing model involves the following actors:
Publisher or affiliate
Typically, this actor is either an influencer, a blogger, or a website owner. They promote a product or brand on their own platforms and encourage their follower base to pursue a course of action. They help boost their partner brand’s site traffic and conversions in exchange for commissions.
Advertiser or brand
This actor pursues partnerships with influencers who can become their affiliates. Through their partnership, a brand or an advertiser expects to gain quality site traffic, strengthened brand awareness, and increased sales.
CPA networks connect affiliates and businesses and allow them to communicate with one another. They are used as platforms where interested influencers can gain another stream of income by collaborating with brands seeking to gain more exposure online.
Affiliates and brands attempt to target consumers to get them to convert. When a consumer completes an action, it’s a win-win situation for both the affiliate and brand because the affiliate receives their commission, while the brand is able to generate a sale and gain a new customer. Meanwhile, the consumer benefits from the action by receiving a reward, a product, a service, or information they need.
What Are the Benefits of CPA Marketing for a Brand?
Connects a brand with new customers and generates sales
By working with affiliates, brands get to expand their reach and be on the radar of consumers who may not have heard about them before. This means that they can connect with potential customers.
Additionally, CPA marketing helps measure the effectiveness of a brand’s or affiliate’s ads. Through it, marketers can analyze their current efforts to see which parts of their strategy they can tweak to produce optimal results.
Low-risk marketing strategy for brands
Brands and advertisers only need to shell out payment to their affiliate once the specific point of action is done. Because of the nature of cost per action marketing, the promotions delivers a return on investment, as affiliates would only get paid once they are able to prompt a desired action from their followers.
Helps brands develop their target market and niche
Targeting is crucial for CPA marketing because brands need to identify potential influencers whose niche or expertise is relevant to their category. Advertisers and brands can then appropriately advertise their products and services to consumers who are genuinely interested in what they have to offer.
Increased brand visibility
By adopting a CPA marketing model, brands and advertisers get to boost their visibility online. More visibility translates to more business, and brands get to build relationships with consumers from across the globe.
What Are the Typical Rates for CPA marketing?
Cost per action rates vary from brand to brand. They depend on the advertiser’s return on investment, which is affected by how much their conversion is actually worth. Typically, affiliates are promised a percentage of the revenue if they are able to close a sale. However, they could also be offered a fixed fee, depending on the action point they need to drive.