CPA

CPA (Cost Per Action) represents an advertising campaign pricing model which earns income based on direct results. Other advertising campaigns pay for a given number of impressions (CPM) and even for a given number of visitors (CPC). Some of the most used forms of CPA are affiliate and referral programs. Using banner ads as an example, the CPA represents the cost the advertiser pays to the website publisher every time a specific user-action is initiated.

Short Overview

The Cost per Action advertising campaign, which is also referred to as "Pay per Action" (PPA), is a popular online advertising model in which each action (whether it is a purchase or any other form of submission) is rewarded once it is linked to the advertisement. CPA campaigns are preferred by advertisers since payment is dependent on the completion of the desired action. An action could be any type of purchase or even a questionnaire being filled in.

CPA is the opposite process and type of program as compared to cost-per-impressions model (CPM), while the cost-per-click (CPC) model is somehow between these types of advertising payment models. Even if the CPA programs are highly popular these days, risks are also involved because the commission are dependent on great conversion rates from the advertiser's website. There are plenty of differences between these three popular online advertising campaign models, but also some similarities such as their main goal and purpose: to attract more customers, increase customer's awareness and earn money form online businesses.

Types of CPA programs

The Cost per Action (CPA) affiliate programs includes the following types of programs:

• Pay per Sale affiliate programs: This is also referred to as "Cost Per Acquisition", and describes the advertising model pricing where the payment is done based either on a fixed amount for each sale or based on a specific percentage for each sale generated from an affiliate's links. This is only a type of CPA program so that not all Cost per Action programs should be referred to as "Pay per Sale " or "Cost per Acquisition".

• Pay per Lead affiliate programs: represents an online advertising payment model which supposes that the payment is done based on lead information such as email, phone,name - information which is generated from links. A lead is generally understood as a sign-up process and this does not involve cash transactions. A lead may be represented by an email address, phone number or a set of such type of information. For the visitors that do not sign up, no payment is done. However, risks are involved in the case of Pay per Lead programs where false leads can be created, but luckily these are easy to spot.

References