Cost per Action is a pricing model of online advertising payment, which involves the transfer of money by the advertiser, only if the target user has performed the desired action through the donor site.
The scheme of the CPA model is as follows: the advertiser places their ad in any form on an external resource – media or contextual advertising, text ads or another offer with a link to the advertiser’s website. Accommodation is free – there is no charge for views. Clicks and transitions to the advertiser’s site are also not paid until the visitor undertakes the targeted action.
The following activities are subject to the grounds for payment:
- registration on the advertiser’s site
- go to the advertiser’s site and perform a conversion action on it: filling out a questionnaire, e-mail a subscription, installing an application, viewing a certain number of pages, downloading files, etc.
- purchase of goods in the online store, payment services.
The CPA model refers to the type of affiliate programs, as the results depend on several sides: the advertiser who offers his services, products, and traffic generators is a donor resource, due to the capabilities of which, you can increase the number of clients.
Payment according to the “pay-per-action” model can be the following: a fixed amount for each action that the user performs for free, and a percentage of the value of the product or service that the user acquires, making the transition from the donor’s resource to the advertiser’s site.
What is Cost-per-Sale
What is a CPS? CPS marketing is payment for the fact that the donor partner attracted to the site of the advertiser the buyer who made the purchase of a product or service. That is, the payment for the sale a.k.a. the payment for the first transaction. If the loyal buyer spends the money next time without the help of an intermediary, then the advertiser does not need to pay the next percentage.
How CPS differs from CPA
After finding out what is CPS, marketers are trying to isolate the CPS model in a separate direction, arguing that making commercial transactions is a separate type of activity. This type of targeted action is paid for by advertisers at the highest rate. Most often, this is the interest rate.
There are also attempts to classify CPA affiliate programs into two separate types: CPL is “Cost per Lead”, pay for the lead (action) and CPS affiliate network – Cost-per-Sale, pay for the purchase.
But purchases are the same action of the Internet user, like any other activity on the site, so many marketers agree that CPS stands for a component of the CPA model, which means you can equalize them.
With the same success, we can separately distinguish the following price models of advertising payment:
- CPO – payment for an order placed in an online store without prepayment
- CPI – payment for installing any application or program
- CPV – pay per page/video, etc.
- CPC – pay per call to a potential customer.
Terms for CPA and CPS marketing
The scope of CPA marketing is the Internet. In this regard, the advertiser must have an Internet site where the target audience will perform useful actions.
Having a donor site is optional. Its task is to generate traffic, to ensure the transition of users to the partner’s website, to the landing pages.
You can also bring customers from search engines, social networks, blogs, e-mail newsletters and other ways that allow you to measure the effectiveness of Internet advertising using metric tools, track user activity on the network, and collect statistics.