What is CPA Marketing?
Cost per action (CPA), also known as pay per action (PPA) and cost per conversion, is an online advertising pricing model where the advertiser pays for each specified action – for example, an impression, click, form submit (e.g., contact request, newsletter sign up, registration etc.), double opt-in or sale.
Direct Response advertisers consider CPA the optimal way to buy online advertising, as an advertiser only pays for the ad when the desired action has occurred. The desired action to be performed is determined by the advertiser. Radio and TV stations also sometimes offer unsold inventory on a cost per action basis, but this form of advertising is most often referred to as “per inquiry”. Although less common, print media will also sometimes be sold on a CPA basis.
CPA is sometimes referred to as “cost per acquisition”, which has to do with the fact that many CPA offers by advertisers are about acquiring something (typically new customers by making sales).
PPC or CPC campaigns
Pay per click (PPC) and cost per click (CPC) are both forms of CPA (cost per action) with the action being a click. PPC is generally used to refer to paid search marketing such as Google’s AdSense.
Cost per click on the other hand is generally used for everything else including, email marketing, display, contextual and more.
Also, pay per download (PPD) is another form of CPA, where the user completes an action to download a specified file.
Understand how you’ll make money
With all of the specific information involved with CPA marketing, it can be helpful to have an overall picture of how you can make money doing this. Essentially, you are creating traffic (a flow of visitors to your website) that you redirect to an advertiser. From there, if this traffic (now potential customers for the advertiser) decides to opt in to the advertiser offer, fill out a form, or buy that advertiser’s product, you earn a set commission. In many cases, this commission can be anywhere from $1 to $6 per lead (customer action), but in some cases can be as high as $22.