CPA-Cost Per Action: Explained from Scratch

We have multiple ways to run online advertising campaigns. One can choose to pay search engines or any other Internet publishers who is willingly hosting your ads each time one of your ads is clicked, with every 1,000 times an ad is seen or clicked, the ad creates a sales-related action.

CPA Advertising

Another option makes a user click on your ad and sign up for a free trial of a product, registering themselves for a free download, or even buying your product. The regular sign-ups and registrations generate leads for the company, while sales generate quick cash in your account.

Such type of advertising where you pay the host a certain amount of fee for each specified type of action taken. Often, for leads that can cost a set amount, while for sales it can be charged as a set percentage of the sale amount.This process of online advertisement is known as “Cost Per Action” (CPA) and can also be referred as “pay per action” (PPA) or performance-based advertising.

How do advertisers get benefited from Cost Per Action advertisements?

Cost Per Action advertising is generally less risk bearing method of advertisement than that of other online advertising techniques. Since you are supposed to pay only when your publisher gets you a lead or a sale, by doing this, you can protect yourself from potential buyers that won’t convert and the click frauds that often leads to a big dent in your pocket book.

On another hand, you are certainly ensuring that you only pay a share of amount when you have money coming in your pocket, or when the door for money opening in is relatively great.

How can Cost Per Action Advertisement bring loss to the Advertiser?

In CPA advertisement, there is a fair possibility for you to lose money instead of earning profits your campaign. It often happens if you have low leads to sales ratio. This may happen probably because you might be paying publishers more for leads than what you are generating from sales revenue.Hence, it is suggested that it is surely worth your while if you have a planning to convert more leads to sales or feel that the advertising exposure is outweighing any current loss in revenue.

If you are facing monetary loss, you can try to negotiate for a lower Cost Per Action fee from the publishers hosting your ads. Or you can also consider switching over to a CPA campaign that is based on sales. Either way, you need to be aware of the fact that your success at conversions can define your ability to find a publisher who is willing to run your ad on a desired Cost Per Action basis.

Why the publishers do not want to run my ad on a Cost Per Action basis?

It is quite possible that you don’t have a strong track record against a specified type of action, publishers may feel that they’re better off hosting ads with more potential advertisers for bringing them revenue.

Even Google, which is considered as the best CPA network, offers a CPA advertising program where ads are placed on Google’s affiliate websites. But to qualify for the program, advertisers are required to prove that they have a site that has a desirable audience, has enough conversions, and makes enough money. These criteria may differ from advertiser to advertiser depending upon their own norms.

Other reason an affiliate network may pass you by due to your financial track record. Various affiliate networks ask about such topics as online revenues, monthly marketing budgets, and Cost Per Action offers in their online advertising applications to track the same.

In that case, you may find out the individual CPA networks have more flexible criteria for doing business.

You can also build your own affiliate network by selecting company websites you are interested to advertise on, and further reaching out to those sites about potential Cost Per Action opportunities.

What is the standard amount that I have to pay per action?

Well, there is no set standards for payments. It is ultimately up to the publisher to accept or reject your offer. However, you should go into Cost Per Action negotiations with a certain figure in mind. It is suggested to do some homework to determine how much you are going to spend per action.

For example, if you are involved with a cost per click or cost per impression campaign, you must figure out how much you are going to pay for each conversion, considering all other norms like whether it is a lead or sale. You can define this amount by using any online Cost Per Action calculator.

Once you have attained your current Cost Per Action, you can try negotiating for lower Cost Per Action for you CPA campaign.

What should I do next?

Sadly, your work doesn’t end after getting your campaign live. You need to be constantly engaged in monitoring the performance of your CPA campaign. With time, keep comparing how return on investment (ROI) from your CPA campaign with the ROI on your cost per impression or cost per click campaigns. If you find that the return on investment for your Cost Per Action campaign, you should consider revising your cost per impression or CPC campaign.

In case, if you are fetching a better return on investment on the cost per impression or cost per click campaign, then you should consider to negotiate a different Cost Per Action amount or reconsider the entire CPA campaign.

It is suggested that if a particular product or service does better with one campaign type and others with another type, you must keep your advertising methods diversified.Contact premium ad network – Apps Discover Technologies to sign up for affiliate marketing.

Contact No : +91-124-4007787 & Email : info@appsdiscover.com.

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