If you are selling products online, you already know how difficult it is to reach the right target audience who can show real interest in your products and finally take out their credit card to make the purchase. Naturally, you are always looking for options to optimize your ads further so that you generate more leads within your budget and in a given time period.
Did you ever try CPA marketing? Well, let’s first understand what is CPA marketing. CPA (cost per acquisition) marketing is a type of affiliate marketing used by businesses to scale their marketing efforts and reach a wider audience while paying only when a desired action is taken by the potential buyer. Let’s get into the details of CPA marketing.
What is CPA in Digital Marketing?
CPA marketing is based on an advertising model that comprises a publisher(affiliate), a company/business (advertiser), and a CPA network. This CPA network is a platform bringing together the affiliates willing to earn commissions by promoting products and the businesses that are looking for their products to be promoted. Here the affiliate only receives a commission when a customer purchases a product through the affiliate’s marketing efforts.
For example, the affiliate might write an appraisal, display an ad on their website, or post a promotional video on social media for the advertiser’s product.
Unlike other types of digital marketing strategies like CPC (cost per click)where you pay to advertise your brand with no guarantee of a sale, CPA marketing only requires you to pay after the desired action has taken place.
Under this tactic, the publisher shoulders the maximum risk as their income is dependent on conversion rates.
What are the 3 Categories of CPA in Digital Marketing?
Based on the way the CPA advertising model works, it can be categorized into three types:
- Pay Per Action
In this category of CPA marketing, the advertiser pays only when the customer carries out a particular action. This action might include visiting the advertiser’s website, watching videos, filling out a form, signing up for atrial, getting a quote, or making a purchase.
- Pay Per Sale
In this mode, the publisher is paid based on the number of sales that are generated from the advertisement on the site. The advertiser only has to pay for sales generated by the site based upon a prior agreed-upon commission rate.
- Recurring Payments
The recurring payments affiliate model ensures that the publisher receives payment each time a customer makes a repeat purchase.
Benefits of CPA in Marketing
CPA marketing works because it affords advertisers access to a wide spectrum of audiences while maximizing return on ad spend (ROAS).
Some of the other prominent benefits are:
By partnering with publishers, you can build product awareness with a wider audience. Content creators and influencers tend to have audiences that trust them, so promoting your products on their site helps build brand awareness and reputation.
CPA marketing is affordable because you only pay a commission if a sale is made, which creates a high return on investment. Commissions can be a fixed rate or a percentage of the sale price.
This is a low-risk form of marketing because you only pay when you receive a conversion. This ensures any referrals you receive generate value while mostly reducing the chances of an affiliate gaming the system to artificially inflate clicks or website traffic.
Easy to Use
A CPA marketing campaign is easy to set up – simply choose a CPA network and an offer to get started – with a low upfront cost. You can appoint an affiliate manager to negotiate affiliate agreements on your behalf.
What are the CPA Online Marketing Best Practices?
Here are certain CPA online marketing best practices that you need to follow to make the most of the CPA marketing campaign.
Form bonds with affiliate managers
An affiliate manager finds affiliate partners that suit your requirements and negotiate affiliate agreements with publishers.
Avoid shady networks
Affiliate fraud occurs when affiliates artificially inflate engagement metrics to earn higher commissions. Some affiliates simply publish low-quality content that does more harm than good to your brand reputation.
Choose a high-quality CPA network that has a strict vetting process for publishers and offers fraud prevention services.
Join a CPA network
As a beginner to online marketing, joining a CPA network enables you to choose a CPA offer and start receiving referral traffic from affiliate sites. A good CPA network updates its offers regularly, so you should have a long list of offers to choose from at any given time.
Implement traffic strategies
Once you have joined a network, you must drive traffic to your site. The most common methods include SEO, email marketing, PPC ads, native ads, Google ads, and social media.
Consider the CPA marketing payment system
To set up payments for commissions, you need to select a payment processor and payment structure. Many CPA marketing payment processors offer fraud prevention and chargeback protection.
Conclusively, if you ever feel tempted to jump on this train, remember that expanding your website’s reach requires strategic planning, and CPA marketing serves the purpose quickly without requiring prior investments. Choose the right CPA marketing network and generating conversions, not clicks is your carrot.
This article is inspired by the following writing from Design Rush