CPA Marketing – Guide For Advertisers

A report of a leading digital agency states that CPA Marketing industry will cross the estimated $6.8 billion mark by 2020. It also claims that more than 80 percent of advertisers devote over 10 percent of their marketing budget on affiliate marketing.

These numbers, along with so many others, successfully put forth the effectiveness and charm of this form of paid advertising for businesses.

What is CPA Marketing?

CPA stands for Cost per Action or Cost per Acquisition. Its definition can be looked at through 2 different perspectives.

For advertisers (or merchants), it is an online advertising pricing model where they pay a small commission to an affiliate who brings them new acquisitions. For the publishers, it’s a simple revenue model where they – an affiliate – promote a merchant’s product or service in return for a small commission.

Commission rate varies, depending on a host of factors. However, advertisers pay the affiliates only when someone converts by taking the desired action such as filling a form, subscribing or purchasing. So all the parties involved, go home happily.

6 Unbeatable Benefits of CPA Affiliate Marketing

Banner advertisement is dead. And chances are you have heard this countless times already. 54 percent of users never click on banner ads because of lack of trust. Ad blocking plugins are increasing significantly. Banner ad spending is shrinking by every passing day.

These scenarios have only paved way for alternative means of promotion—CPA affiliate marketing being the foremost one, which uses not only visuals but also other forms of contents to promote the products or services.

Here are 6 unbeatable benefits of this paid advertisement model:

1. Products or services get wide exposure in a relatively shorter span.
2. Advertisers only pay when the desired action is derived from the prospect.
3. Affiliates (or publisher) bring in their own expertise to the table which eventually benefits the advertisers.
4. More traffic to company’s website that often costs nothing.
5. Inbound links to company’s website that helps in SEO.
6. Easy tracking of affiliates.

Why and who should do CPA Marketing?

Any brand or business looking to increase its website traffic, customer engagement rate and direct sale can (and must) go for CPA affiliate marketing. A right strategy can fit in various stages of a sales funnel, supplementing any part of customers’ journey.

In fact, 83 percent of marketers use affiliate program during the discovery and awareness phase and 79 percent use it during the conversion phase. Many use this promotional method to even create ongoing customer engagement.

So, countering what is otherwise standardized, a smart and succinct Affiliate marketing strategy is not only ideal to drive direct sales but is equally favorable for other digital goals like better brand recognition and higher engagement rate.  

If you own a business – regardless the niche – having CPA a big part of your marketing strategy is very important for an overall digital success.

Get Familiar with the Common CPA Marketing Terms

Admittedly, this paid advertisement model has advantages in heaps. Sadly, like every good thing that comes with challenges—so does this one. It’s quite simple but not easy.

So, before you move forward, you must understand various aspects of CPA marketing to optimize your efforts and investments. Start by getting familiar with some common terms.  

• Affiliate Network– A third party that provides affiliate management to merchants, bringing publishers and advertisers together.  
• Affiliate Tracking– A tracking id that is unique to affiliates to trace the number of sales they have made.
• Advertiser– A company or merchant whose products or services need to be promoted.
• Click-Through Rate (CTR)– Number of times the affiliate advertisement is clicked on.
• Commission– A predefined fee affiliates get paid by the advertisers for generating the desired outcome.
• Conversion Rate– As opposed to CTR, this is the number of times the click-thru converted into taking the desired action (like signing up and purchasing).
• Display Ad– A graphics-rich banner ad that affiliates use to promote merchants’ products or services.
• PPC– Pay Per Click is paying commission to the publisher every time their affiliate link is clicked on.
• PPL– Pay Per Lead is paying commission to the publisher every time a lead is generated through their affiliate link.
• PPS– Pay Per Sale is paying commission to the publisher every time a sale is made through that particular affiliate link.
• Publisher– Also known as an affiliate, an individual who promotes merchant’s products or services.
• Recurring Commissions– Paying affiliates a recurring fee every time their referrals make purchases from the merchant.

Of course, there are plenty more related terms. But for starters, get familiar with the important mentioned ones.

How to get started with CPA Marketing?

The first step in designing a high-rewarding CPA marketing strategy is to know your needs and business goals. For that, you must identify where your digital marketing strategy is failing. Are you struggling to convert? Do you need more traffic to your website? Or are you failing to grab eyeballs in the absence of decent brand recognition?

In short, where do you want to fit the CPA marketing strategy in your sales funnel?

Answer this and follow it by setting your budget. And then calculate the estimation of your Return on Investment (ROI) and Cost Per Action.

Now that you’ve sorted out your basics, move on to select a reputed, relevant and affordable CPA Affiliate Marketing networks. There exist many, so choose wisely. Be thoughtful, do a thorough research and undertake various factors including your long-term goals and, of course, budget. Here are top 5 affiliate networks of 2017 to get you start your research:

1. Affiliate Associates
2. ShareASale
3. CJ Affiliate
4. ClickBank
5. Rakuten Affiliate

Each of these has distinct programs, fees and features. Check them out – and more – to see which one is more suitable for your individual case and the signup to them confidently.

If things go well and you have planned your CPA Marketing strategy properly, everything for your business will fall into right place, with higher website traffic, increased conversion and boosted engagement rate.

Here are few pro tips to optimize the return on your promotional efforts:

• Know what you want to achieve  
• Be certain of the exact Cost Per Action
• When starting, stick to just one affiliate network
• Don’t expect outcome in miraculous time frame

Conclusion

If you haven’t already, redefine your digital marketing strategy and incorporate CPA affiliate marketing in it. Execute your plans well, don’t over-expect and, above all, measure, analyze and improve the result of the program on your website traffic and sales.