Getting started with affiliate marketing can be an exciting endeavor. However, sometimes confusion can result due to a lack of clarity surrounding different acronyms.
Cost per action (CPA) is a marketing model and affiliate sales metric. It’s also one of the most misunderstood terms in affiliate marketing.
Below, we clear up any vagueness or ambiguity about CPA in affiliate marketing.
Table Of Contents
- Quick Summary
- What Does CPA Mean in Affiliate Marketing?
- How Does CPA Affiliate Marketing Work?
- Types of CPA Marketing Models
- Benefits of CPA Affiliate Marketing
- CPA Affiliate Marketing Tips
- How Do I Become a CPA Affiliate?
- CPA is cost per action, a marketing model that pays for clicks, signups, and sales.
- CPA is also often referred to as a sales metric.
- Networks run CPA campaigns because they are low risk with an affordable operating cost.
- Leverage SEO landing pages, paid advertising, and industry networks to enjoy success in CPA marketing.
What Does CPA Mean in Affiliate Marketing?
CPA means cost per action in affiliate marketing.
An affiliate program manager will often use the term to refer to the marketing model.
However, in some cases, it can also mean the affiliate sales metric. Let’s explore both meanings.
CPA as a Marketing Model
CPA marketing is an affiliate model where a business pays a fee to a CPA network every time a website visitor performs an action.
The CPA network then pays the affiliate marketer on a per-action basis.
Some of the actions that affiliate marketers get paid to perform include:
CPA as a Marketing Metric
CPA affiliate network managers sometimes refer to CPA as a marketing metric. That metric reflects how much a client company pays per action on average.
Businesses can analyze this metric to gauge the efficiency of their CPA campaigns, especially if they pay different prices for each type of action.
How to Calculate CPA
The CPA formula allows an affiliate manager to arrive at a numerical figure that will aid future cost projections.
The formula for CPA looks like this:
Cost Per Action vs. Customer Acquisition Cost
Many affiliate marketers confuse CPA and customer acquisition cost (CAC).
While these two online marketing metrics bear some relation to one another, they remain the products of two distinct formulas.
The formula for CAC is as follows:
Part of the confusion between CPA and CAC relates to the fact that both formulas sometimes produce the same result.
One example might include a CPA affiliate marketing network that only pays for one type of action. In such a case, the cost per action and the customer acquisition cost would be the same.
How Does CPA Affiliate Marketing Work?
CPA affiliate marketing works by paying affiliate partners every time a web visitor performs a specified action.
Affiliates promote CPA offers in cost-per-action marketing through:
- SEO landing pages
- Google ads
- Mobile ads
- Banner ads
- Email marketing
- Native ads
- Paid advertising
The types of actions specified in the CPA marketing agreement make a significant impact on the cost per action. CPA affiliate networks will pay different amounts for each type of action.
For example, an affiliate for may be payed more for a sale than they would for an email news letter sign up.
How Do CPA Affiliate Marketers Make Money?
CPA affiliate marketers make money by producing content that causes visitors to perform a specified action.
The CPA marketing model allows affiliate partners to make money online without closing a sale.
Some of the best CPA networks to work for pay per sale in addition to clicks or signups.
Depending on the terms of your contract with your CPA network, you might get paid every time someone clicks on your affiliate link, makes a purchase, or requests a quote.
Each CPA affiliate program will follow a different advertising model and pay varying amounts for the same action.
Are CPA and Affiliate Marketing the Same?
CPA marketing and affiliate marketing are not the same, although they are related.
Affiliate marketing is broad because it also uses offline channels to complete transactions.
All CPA marketing is affiliate marketing. But, not all affiliate marketing is CPA marketing.
Types of CPA Marketing Models
Many affiliate programs use various CPA advertising schemes, each designed to reach a different goal.
Discover some of the most common CPA marketing models in the affiliate industry below.
Pay Per Lead CPA Networks
Pay per action is the other side of the same coin as cost per action. One of the most widely used per-per-action models is pay per lead.
An affiliate manager will pay publishers, bloggers, and influencers for driving website traffic to product pages, signup sheets, and service provider websites.
However, CPA networks also pay for other actions, including:
- Email list signups
- Form submissions
- Survey completions
- Price quote requests
Pay Per Sale CPA Network
CPA stands for “cost per action,” which includes both leads and sales.
Many CPA networks pay affiliates more for sales than leads, either on a commission or flat-fee basis.
Let’s take a look at the two most common types of pay-per-sale affiliate partnerships.
Managers seem to prefer commission-based affiliate partnerships over flat-fee arrangements.
Affiliates must drive traffic from a landing page to a product or service page and close the deal to get paid.
A CPA network will use a commission-based CPA program because it’s low risk. They are less likely to lose money if an affiliate receives a commission only after a sale.
The other popular pay-per-sale scheme involves a flat fee. This type of marketing model rewards affiliate marketers who drive quality traffic and close deals.
Regardless of the sale amount for each transaction, the affiliate gets the same flat fee.
One lucrative CPA offer that experienced affiliates sometimes receive includes residual payments.
Most campaigns only pay publishers and influencers once per action. Others deliver recurring commissions when an affiliate’s customer base makes repeat purchases.
An affiliate marketer can generate leads for repeat business with SEO landing pages, email advertising, or ad spends.
Benefits of CPA Affiliate Marketing
Affiliate marketing networks can reap substantial rewards using the CPA marketing model.
From low costs to far reach, cost-per-action marketing offers a number of welcome benefits. Find some of the main perks below.
Because affiliate programs only pay out when web visitors perform specific actions, the risk of wasting money is minimal.
However, managers must monitor their cost-per-action campaigns. The clicks, signups, and submitted forms can pile up quickly.
High Return on Investment
Cost-per-action marketing often provides a high return on investment (ROI) because CPA affiliate networks get precisely what they want: clicks, traffic, requests, and other interactions.
A CPA affiliate program can experiment with different payout methods to fine-tune a marketing campaign.
Low Startup Cost
One of the best benefits of CPA marketing for companies providing affiliate partnerships is its low startup cost.
There is no need to hire and train a bunch of writers and graphic designers. Companies pay creative talent (affiliates) based on performance, reducing a lot of direct labor costs.
Wide Brand Recognition
Your CPA affiliate network partners with talent from around the globe. So, your brand will reach new markets faster.
There may be no better way to share your products far and wide than CPA marketing due to its affordability and global reach.
CPA Affiliate Marketing Tips
For marketers with minimal experience with CPA models, the process may seem confusing at first.
CPA marketing proves rather straightforward. However, a few common pitfalls do trip up professionals looking to expand their businesses with a CPA scheme.
Fortunately, we created a list of CPA affiliate marketing tips to help you.
Break Down Barriers With a Splash Page
Every time visitors reach a new web page, their walls go up and they get defensive. Is this a reputable website? Should I click something or should I leave? Am I about to get scammed?
Calm your visitors down and disarm them with an engaging, multimedia splash page that they see before viewing your website.
When the first thing they see is a well-produced, engaging intro, they assume they are not dealing with a fly-by-night company.
Design a Fully Optimized Landing Page
Your SEO landing page is your golden goose. To ensure it continues laying 24-karat eggs, you will want to implement all of the latest SEO tactics at your disposal.
Likewise, you must hook your readers, get them excited, and direct them toward your checkout page. Invest in high-quality content to motivate your web visitors to make a purchase.
Establish Warm Relationships With Your Affiliate Managers
Your managers serve as the gatekeepers for your affiliate marketing campaigns. You should try your best to befriend them and do a couple of favors for them, if possible.
A good way to start this process is by occasionally emailing them and asking them how things are going on their end. You can also try adding them to your Facebook friends list.
Once you have established a close working relationship with your affiliate managers, they may handpick you for new affiliate campaigns and refer you to some of their friends at other affiliate networks.
You can also occasionally ask them if there are any new opportunities with campaigns that are converting the best.
Thoroughly Investigate Your CPA Program
Not all CPA programs are made the same. You will need to do your homework on each network before signing up. That way, you will avoid wasting your time working for a network that doesn’t pay.
Also, look out for CPA programs that require you to use spammy tactics. You don’t want to ruin your reputation just because you need cash flow in the short term.
Consider Using Paid Advertising
When it makes economic sense, you can use paid advertising to drive traffic to your CPA landing pages. However, you will need to do the math.
If you choose an affordable paid ad campaign and the math works out, you can generate significant volume. So, even if your profit per action remains low due to the extra ad spend, you still make more money overall.
How Do I Become a CPA Affiliate?
To become a CPA affiliate, you need a landing page, a CPA network, and a CPA offer that you can monetize. Search for the best affiliate programs to get started.
Affiliate marketers both new and more experienced can always learn something new.
Cost per acquisition is a term that gets frequently confused but we hope this guide has helped simplify the subject.
To learn more about affiliate marketing including how to rank and flip websites for profit check out this free webinar.