Many people look for the information on how to make money on the Internet because there is an ocean of the possibilities.
However, the time and the common sense show that most of them turn south at the first check and they are not worth the time spent on it.
Nevertheless, everything is not as bad as it might seem at the first sight and some methods are even more serious than you could think.
Let’s pass over to the things which can actually bring you money on the Internet. The bright example is the affiliate marketing.
In today’s article, we will uncover what is a CPA.
In addition, we’ll get to know the way it works and we’ll be able to discover all pros and cons of using it.
What is a CPA: the definition
CPA is deciphered as the cost per action.
This marketing appeared several years ago and it already surpasses the traditional web mastering (creation, development, and promotion of the sites).
Nowadays, CPA is the most economic working model of payment for the advertisements on the net (for those who spread the ads and the business owners).
In addition, people do not wish to pay for the reviews and clicksanymore, but the precise actions of the users are sure to be paid.
Earlier, the webmaster was paid not even for the potential clients but for the potential attraction.
Surely, it did not bring any profit for anyone but the webmaster.
The CPA advertising model is mainly applied to the commercial projects where the sales happen directly on the Internet as well as the acquaintance with the services and goods of the salesman.
In this situation, it may include:
- The life insurance companies;
- The online stores;
- The services of booking the hotels and different tickets;
- The real estate agencies;
- The tourist companies and so on.
The sources, which were created especially to place the CPA advertisements, have the targeted pages where the potential participants, clients, and customers get due to the advertising links.
On the targeted pages, you can do such targeted actions: to file the order, to put the goods in the basket, to file the application or the registration form, to make the call, to book something online and so on.
How it works?
So, in the chain of CPA marketing, there are only 3 parts that make a circle of the mutually profitable cooperation. If at least one part is missing, the scheme of CPA business stops working.
Well, CPA consists of the network itself, the publisher (the webmaster or the site’s owner) and the advertiser who publishes the offers – the affiliate advertising offers.
Everything happens this way:
The network takes the functions of attraction the advertisers and the choice of the suitable sites to publish the advertisements.
In addition, it counts the number of clicks, the payments to the site’s owner and sometimes it prepares the advertising material.
- The advertiser has very simple functions:
- He needs to make a deal with the network (usually, it is in the paper form because the formal offer is not enough),
- He defines the targeted action,
- He states the fixed price or the percentage of the income or the value and he browses the banners,
- He increases the budget and can get the clients.
- From the point of view of the webmaster the functions are more complicated:
- He needs to understand the interests of his audience when he chooses the formal offer;
- He must finish the settings of the site;
- He must be aware of the details of the billing, i.e. the network pays the commission with the delay (from 7 days to several months) and sometimes uses the exotic payment systems.
However, the personal resource is not always needed – some masters can set the purchase of the traffic from the context and banner advertisement so that the profit from the affiliate program will be higher than the advertising budget (traffic arbitrage).
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The CPA definition also includes such CPA models as:
- Cost Per Sale (CPS) = the sales;
- Cost Per Lead (CPL) = actions.
According to them, the registration of a user on a website and the subscription to the newsletters belong to CPL, while the purchase – to CPS.
I believe that everyone understands that every advertiser is ready to pay huge money for the real clients instead of the false promotion.
The payment per clicks, reviews, and links does not always bring the desired result from the user’s point of view.
The advertiser is, first of all, interested in closing the deal and in targeted actions of the users who visit his website.
The targeted actions of the visitors can be various for the CPA advertiser:
- The subscription to the newsletters or texts (mobile service) from the advertiser.
- This is likely to be considered the initial stage of interest to the advertiser.
- The registration of the user on the advertiser’s website.
- The installment of free software, apps, and pictures with the information or images of the advertiser.
- Now the user gets to the group of the interested clients.
- The purchase of the content, goods or services.
- These are the actions for which the advertisers annually pay a lump sum of money.
The main terms of CPA
When you learn what is a CPA, it’s important to know which terms are connected to it.
If you do not understand them, it’ll be impossible to understand this system and start working with it.
The main terms and definitions which are connected to CPA:
Traffic – is the flow of the visitors who are sent to the partner’s website.
To pour traffic means to transfer the visitors from one site to another.
- Traffic arbitrage – in CPA it is the visitor’s purchase on one site which was poured to another in order to get the profit.
- A lead – is a person who makes the paid action for which the partner will be paid.
The hold time is the time within which the brought lead is checked by the company.
If it turns out to be artificial (such as using the tools of active advertisements) and you are uncovered, the partner won’t get the payment.
Moreover, if it is serious, the case can even be developed.
That’s why it is profitable and safe to use honest marketing in CPA.
- Profit is the sum of earned money.
- Context is the contextual advertising (i.e. text).
- A teaser is the teaser advertising (bright, sometimes scary and attractive pictures which allure by the screaming titles).
- The offer is the affiliate program with its own conditions and offers for making money which works with the CPA network.
The ways of realization of CPA
There are various ways to fulfill CPA campaigns.
The most popular and effective ways of CPA are:
The promotion of the product using the general sites
Usually, such resources contain the information about the advertised goods, the users’ reviews on them, the independent ratings and comments.
Every review leads to the separate landing page of the item on the supplier’s site which is usually the huge online store.
The site’s owner gets the reward every time the user goes to the advertiser’s page and buys the product.
And you can use social networks (Facebook and Twitter or others) for the promotion of the product.
Using the selling sites or pages
Here we speak about the separate resources which have only one page and were created on the huge resources.
These pages tell the audience about the product and stimulate them to buy it.
Besides, the developers of these pages try to get the e-mail address of the customer.
In the context of CPA, the one-page sites transfer the visitor to the seller’s site where he is able to file the order.
The searching promotion with the payment per actions
In this case, the agencies use the content marketing to create and publish useful content for the audience on the behalf of the brand.
However, CPA models do not pay for traffic or the position in the searching results, while the leads are the user’s conversion actions.
Cost Per Lead (CPL)
This approach to publishing the advertisements differs from the traditional one only by the payment system.
As it was previously mentioned, the advertiser pays only per leads instead of the reviews of the ads (banners or links) and the visitors’ transfers.
The advantages and disadvantages of using CPA marketing
Advantages of using CPA for the advertisers themselves:
- Fixed expenses on the Internet marketing: the cost of the targeted action is very precise and it simplifies the planning.
- Publishing on the theme grounds without the necessity to close the deal, to spread the banners and pay to every site owner separately.
- The possibility to give on outsourcing those elements of the affiliate marketing with which you do not want to deal (let’s say the calculations of the traffic and payments according to the complicated schemes).
- In the highly competitive themes (banks, cars, etc.), the price of the CPA conversion might be lower than when working with the contextual advertisement or SEO.
The advantages of using CPA for the owners of the theme sites, publics in social networks and so on:
- The best possibilities to make extra money – the affiliate programs are much more profitable than the advertising networks of the searching engines.
- The possibility to switch between the offers that are the most interesting for your audience which also increases your income.
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Now we can discuss the disadvantages of CPA systems for the advertisers:
- The need to sign the paper contracts before the start.
- The small advertisers face some difficulties – the networks are interested only in the partners who are able to pay much, regularly and for long (the perfect partner is a bank or an airline).
- The need to compete with other advertisers for the webmasters – to increase the size and duration of payments.
- You need to watch the dishonest webmasters who can bring the low-quality traffic or cheat when writing the cookies to increase the commission fee (good affiliate programs watch this but anything can happen).
The disadvantages of CPA for the partners are:
- The unclear terms of cooperation. However, a good negotiator can even treat it as an advantage.
- The unreliability of the representatives of certain networks – the delays with the payments or the problems with communications.
We hope that now you know what a CPA is.
Let’s come to a conclusion: in a CPA marketing, the advertiser receives the customers for the goods while the webmaster has a certain sum of money.
CPA network has its percentage and makes the circle of “trust” and the win-win terms.
For whom is it win-win? For everybody.
The company does not waste money on the often useless traditional advertisement and pays only for the certain actions which bring new real clients.
The partner gets his income for the work he did honestly, he gets experience and starts working on himself.
A CPA network makes money being the mediator and the user gets the wanted item or service.