Do you want to run an online advertising campaign for your company's products or services? If so, one of your major concerns must be the return on investment (ROI)? Turning visitor clicks into sales is not an easy task. However, easy does not mean impossible. It all depends on the marketing business model you employ on your online ads. Rather than betting on a potential sale based on the number of clicks, why not bet on tangible results. This is known as Cost Per Action or CPA. The question is: what is Cost Per Action?
What is a Cost per Share (CPS)?
Cost Per Action is an affiliate marketing business model used online that provides an "affiliate" with a commission based on the action taken by the visitor on the platform. In other words, it is a billing method that allows an advertiser to pay an affiliate based on the number of results of the advertising campaign conducted. It is a unit of measurement of cost of purchase in the same category as CPC or CPM. The difference is that the CPA is based on concrete results, i.e. transformation. Hence its other name: Conversion Cost.
If today, CPA is regularly associated with web marketing, it should be noted that the use of this billing method dates back to well before the advent of the Internet. Indeed, CPA marketing was first used for telephone call campaigns. The sales representatives in charge of the promotion are paid according to the number of actions obtained.
The term "action" is usually associated with a "completed sale". But in the digital domain, note that depending on the objective of the advertising campaign, the action can mean watching a video, registering on the website, requesting a quote, downloading an application, etc. With the advent of digital marketing and the intensive use of sponsored links, the CPA has become an indispensable tool for optimising the return on investment for companies.
How does CPA marketing work?
To do CPA marketing, you need to know the following three players: advertiser, affiliate and CPA network.
The CPA marketing players
The term "advertiser" refers to the company that wishes to promote a product or service through an online advertising campaign. Sales and demand for service is the ultimate goal of any business. However, an advertiser may have other objectives in mind such as generating leads, generating quality traffic or boosting conversions.
The term "affiliate" or "publisher" refers to the person in charge of the online advertising campaign. This person promotes the product or service through various techniques to drive traffic to the advertiser's desired page. In the digital age, all kinds of affiliates have appeared on the market. The affiliate is not necessarily a professional, but must have knowledge in the field (niche). In general, the affiliate is a blogger.
The CPA network is a platform that acts as an intermediary between the advertiser and the affiliate. It is through this platform that the advertiser finds the affiliates it needs. It's a win-win for both sides. For the advertiser, it is a solution that allows to promote at lower cost. For the affiliate, it's a solution that makes it easy to make money.
How to choose your affiliate
An affiliate does not have to be a professional, but that does not mean that anyone can promote a business. It is imperative for an advertiser to choose an affiliate who meets certain criteria.
One of the criteria is performance. Note that performance does not necessarily mean the number of views, but rather the number of actions or conversions generated. You should be aware that some affiliates cheat on the number of traffic, which represents a large number of views, but a low action rate.
Secondly, the affiliate in question must operate in the advertiser's field or niche. For example, for a company that manufactures dietary supplements, an affiliate must offer content that is relevant to that product. In this context, a blogger who offers advice on diet and health is the most appropriate.
The safest way to get a quality affiliate is through a CPA network. Most affiliate platforms are strict about their members. For example, a minimum traffic threshold may be required of the affiliate, in addition to other criteria. To avoid fraud, some networks require affiliates to be interviewed by an affiliate manager.
What is the value of CPA in digital marketing?
CPA marketing has many advantages for both the advertiser and the affiliate.
Payment according to the sale
Whether online or offline, an advertising campaign is expensive to finance. It is therefore important for an advertiser to choose a marketing business model whose results are commensurate with the funding. Fortunately, this is exactly what CPA offers. An advertiser does not pay for traffic that does not result in conversions. To avoid this, affiliates should be chosen carefully, with a preference for the best performing ones. Furthermore, to maximise the chances of conversions, it is recommended to diversify the affiliates. Here again, this is an advantage, as the market offers a wide range of affiliates.
Simple to set up
As a monetisation strategy, CPA marketing is easy to implement. In practice, an advertiser needs two things to run a successful digital advertising campaign, starting with a website. This can be a showcase site or a shopping site. For the second element, the advertiser must become a member of an advertiser network. Through this network, you have access to a community that makes it easier to find help, especially in finding quality affiliates. For the affiliate, once the work is done, all they have to do is wait for their paycheck, which should arrive every fortnight or at the end of the month.
Substantial return on investment
An advertising campaign is designed to encourage action. If there is no action, there is no return on investment. To avoid this, CPA offers a solution based on tangible facts. Statistics show that people are more likely to spend money if a product or service is offered by an affiliate. In terms of figures, affiliate marketing generates about 16% of the revenue that is generated online. This means that by opting for CPA marketing, the advertiser gains access to a higher quality of traffic. In addition, on most traffic sources, the value for money is excellent.
Marketing with little risk
In other marketing business models, the risks can be high as the return on investment is uncertain. An affiliate may have subscribers, but this does not guarantee that leads will be generated. Hiring an affiliate with a non-effective billing method means wasting money unnecessarily. So by opting for CPA marketing, the advertiser avoids this risk with a tailored rate. In addition, the way in which the affiliate markets the product or brand can be monitored using dedicated tools. So, in addition to controlling the cost, you can also closely monitor the marketing.
Multi-action marketing and outreach
CPA marketing is effective in promoting a company's product and service. No matter what industry an advertiser operates in, such as technology, fashion or others, marketing is done with CPA. In fact, product distribution is increasing as the scope of the market expands. But you should know that its scope is not limited to that. It is not only about marketing, but also about extending the reach of the brand. The company can easily convey a brand message, in a consistent manner, to a wide audience.
How to implement CPA in digital marketing?
Today, there are a multitude of ways to create affiliate marketing to promote a product, service or brand.
The website
When it comes to digital marketing, the website is obviously the main tool to promote a brand and its products. To generate traffic, there are several actions an advertiser can take.
The first is to buy traffic via tools such as Google Ads and Facebook Ads. This solution is effective, but deserves to pay attention to the cost of acquisition. Indeed, the advertising cost must be low compared to the remuneration obtained. It is therefore an option that deserves a long reflection.
On the other hand, website affiliation is an effective solution that can be done with several tools. An affiliate, especially a blogger, can promote the advertiser with a landing page, a banner ad, a link to the offer, etc. The key is to ensure that the advertiser's website is a good one. The key is to ensure that the affiliate chosen has a niche that is relevant to the business sector.
The buy media
Still in the same vein of website affiliation, there is the media buy. The concept is simple, the advertiser buys what is called an "advertising insert" on a platform where there is a lot of traffic. This is mostly used when an advertiser wants to promote an offer. The offer is displayed on a specific location on the website for a specific period of time. This method is one of the oldest methods used for affiliate marketing. The most important thing in this method is to keep the focus on the return on investment.
The video
In recent years, videos have become the preferred method of affiliate marketing. Many affiliates have become real celebrities by creating online video content. We are not talking about bloggers here, but about "vloggers". Vloggers mainly use the YouTube platform to make video content.
In practice, in order to do video affiliation, the affiliate must talk about the product or brand in his video and add a link in the description to go to the page desired by the advertiser. Otherwise, there are also videos on social networks, especially Facebook. This type of video is generally a complement to the affiliate's YouTube channel.
