Nowadays we have a wide range of variants how to handle our advertising campaign: some companies prefer to pay for each clicking the ad or every thousand time of displaying the ad. There is one more quite popular way is to pay when a particular action was performed: it may be subscribing to the news, watching the video etc.
Such type of advertising is called cost per action (CPA). Today we are going to reveal its benefits and how it can be implemented into your advertising campaign.
Who will benefit from CPA ads?
Cost per action model is primarily suitable for companies involved in selling real goods, or organizations that promote their services mainly on the Internet. It is an often case for travel agencies, banks, online shops and games to apply for it. Offline businesses like lawyers, car services or building companies can be also mentioned here.
Main advantages of CPA model
- total transparency – you always know what you pay for, i.e. for a particular desirable for your company action:
- money saving – it is a result from a previous point, you don’t spend money if a necessary activity hasn’t happened;
- high quality of traffic – only people interested will perform necessary actions.
A fly in the ointment
- Although the traffic is not a waste at all, however it is possible to make a conversion only once. As a result, for example, at the moment of discount season you will catch a big bunch of free ride lovers, and the percent of really necessary customers may be too low.
- Per action advertising is not very good from the point of view of price elasticity. The price for ads is a bit higher at holiday times as people are more likely to buy more than usual.
- CPA is a hard ads model, it takes only desired actions into account. The advertisers are unlikely to spend more money for advertising at the very moments when it is really worth doing.
Where we can implement CPA advertising?
- Websites with reviews. Such resources normally contain information about reviews on products, users opinions, independent ratings and feedbacks. Each product has a link to its own landing page in the advertiser’s website. Website owner is rewarded for each time when the user is redirected to advertiser’s pages and makes conversion.
- Selling pages or websites. It is generally the place with detailed and attractive information given about the product, obviously, stimulating to make a purchase. The pages redirect the user for the advertiser’s website to make a buying.
- Content marketing approach with making useful for the audience content on behalf of the advertiser. Only conversion actions are taken into account here.
- Ads with payments for leads only (CPL). In this case money is not taken for showing or clicking the ads.
CPA advertising model is not something new at all. But searching engines have significantly improved their operation algorithms, users have succeeded in being ads blind and now is exactly the right moment to implement a new approach in marketing which CPA can become.