CPA advertising is not a new phenomenon, but it is still often misunderstood by those who easily confuse it with CPC advertising, a related by not identical program. CPA stands for “cost per action” while CPC stands for “cost per click”. To further complicate matters, companies such as ClickBooth and others often provide customers with varying budgets and sizes with both services, making it even easier to confuse the two. Not only do CPC and CPA programs function somewhat differently, they also appeal to two different groups of clients. Learn here how CPAs advertise for clients for their advertising programs and what makes a successful CPA client.
What Does Cost Per Action Mean
“Cost per action” essentially translates to mean that every time a customer takes a specified desired action (which can mean the customer clicks on something or purchases something they have clicked to get to, and sometimes both) there is a fee paid to the provider of that advertising service. Cost per action, while often more expensive than its CPC counterpart, is still widely considered to be both cheaper and more cost effective amongst certain customer groups for the ability to closely target the advertising to the ideal customer target base. If the action is not taken, there is no cost to the business. That is the beauty of cost per action advertising strategies.
How Does a CPA Program Work
Basically, a CPA program sets up a chain reaction that is desired. For instance, if the business knows that their desired customer base frequents a certain webpage, they might purchase a CPA advertisement that will display on that webpage. The customer may visit the webpage and see the ad, then click on it. If the customer then completes the desired action (visits another webpage, makes a purchase, etc.) then the business is charged.
Who Makes the Best CPA Customer
Because CPA advertising programs can get expensive, even though the costs are not generally as high as a traditional advertising and publicity program might be, the best CPA customers are the ones who have some flexibility in their monthly advertising budgets, and are willing to go through a few months of adjustments before they find a strategy that works best for them. CPA customers may come into the marketplace with a strong pre-existing understanding of where their target demographic goes online, or they may have to discover this through trial and error. Obviously, the less the business knows in advance about where their ideal customer is going online, the more costly a CPA program can be to institute, track, and adjust. This is also why sometimes businesses choose to use CPA programs for testing purposes only, and then they might switch over to a fixed cost program once they have some basic data. If you are trying to choose an affiliate program, are testing a new product or ad message, have not received good results with other ad programs, or other experimental reasons, then a CPA program is a good way to get a toe in the waters.
About the author:
Marisa Stoma is a freelance writer who specializes in advertising, marketing, and business topics. She has long been a proponent of the cost effectiveness of newer advertising tactics such as CPC and CPA advertising.