A person engaged in business is interested in its effective promotion. Promoting a business on the Internet, every businessman wants to get maximum results without spending a lot of resources on the process of selecting a suitable site for promotion and understanding what exactly the advertising budget is spent on. To ensure, this allows the use of CRA-model of marketing. In its application, advertisers pay for specific results from the use of advertising. What is CPA-marketing, how does it work, what should be taken into account when choosing a suitable affiliate network?
We advise you to read the article “Which payment model is better to choose webmaster: CPA or CPL?” published by AffCommunity.
CPA – What is It?
The literal deciphering of the abbreviation CPA in English sounds like “payment for action”. With the help of this indicator, you can calculate the cost of attracting a user who made a certain target action. Target actions can be different. It can be a purchase of a certain product or service on the site, filling out an application form, subscribing a visitor to a mailing list, etc.
CPA is a model of advertising, in which only the target actions performed by users are paid for. When using it, the advertiser does not have to pay webmasters for each click of a user or his transition. The advertiser pays for actions, such as filling out a purchase order for a product or service.
AffCommunity wants to familiarize you with another RevShare payment model. What is RevShare you can read here.
The Principle of CPA Work on a Concrete Example
Let’s say the owner of a flower store runs an advertisement using the CPA payment model. He chooses placing an order in an online store as the target action. Placing the ad costs the business owner $1,000. After viewing the advertisement placed by him, 100 people visit the store’s website and each of them places 1 order. That is, each order in this case costs the owner of the store in 10 dollars. If desired, the owner of the business could use other advertising with pay-per-view or pay-per-click advertising. This could require less investment, but the predictability of the result would be lower, because when paying for impressions or clicks there is no guarantee that the user will eventually make a purchase.
Advantages of the CPA Model
- Provides savings. Payment in this case is made only for targeted actions.
- It is distinguished by the simplicity of launching. When using this type of advertising, there is no need to independently find partner networks for placement. It is convenient to control it, to determine the sources of responses, to assess their quality, to monitor the spending of the advertising budget.
- It can be used for mass consumption products. Such advertising can be used by businesses that sell goods or services of wide consumption through the Internet. With its help it is convenient to promote products that are oriented to a large target audience with a wide GEO, for example, online hotel or ticket booking services.
Conclusions
CPA is a popular promotion model that provides for payment for the result in the form of targeted actions performed by end users (subscription to mailing lists, payment for orders, etc.). It is the basis for CPA networks that perform intermediary functions between partners and advertisers. This model is suitable for businesses that have a wide specialization and are interested in productive online promotion.
