CPA

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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.

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 type of program as the cost-per-impressions model (CPM), while the cost-per-click (CPC) style campaign falls between these models. CPA programs are popular, but risks are involved since commission is dependent on great conversion rates from the advertiser's website.

Types of CPA programs

The Cost per Action (CPA) affiliate program 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.

• Pay per Lead affiliate program: Represents an online advertising payment model which supposes that the payment is done based on lead information. A lead is generally understood as a sign-up process, which does not involve cash transactions. A lead may be represented by an email address, phone number or a set of such type of information. No payment is due for the visitors that do not sign up. Risks are involved in the case of Pay per Lead programs since false leads can be created, but these are generally easy to spot.