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What is Pay Per Action | Cost Per Action Advertising?

Cost-Per-Action is an online advertising system designed to benefit both advertisers and affiliates (middlemen, or women) who want to to boost their online incomes.

How does CPA work?

Cost-Per Action is also called CPA, Pay-Per-Action or PPA and needs 4 elements to work together to succeed.

1. The Advertiser - who produces the goods or services and wants to advertise them to as many people as possible on the Internet.
2. A CPA network - who links the advertiser with marketers who will promote these offers
3. Affiliates - Just a another name for marketing partners who actually promote the offer.
4. The Client or customer - the people who actually sign up for the offer.

In cost per action advertising advertisers register their goods and services with a network and then affiliate marketers advertise them so as to draw traffic to the advertisers website.

Pay per action describes the  fact that you the affiliate get paid every time your visitors take a specific action. Unlike most advertising, the action does not ususally mean they have to spend any money or buy something.

CPA Networks

CPA offers are usually run by a CPA network which manages a large group of vendors, affilate marketers and CPA campaigns. They are usually more selective in who they allow to join as they need to ensure their vendors money is not wasted.

In most cases they will set up an account for you where you can view the statistics for several different campaigns you are running as well as monitor your payments.

In many cases the network also give you with a manager who should be able to steer you to the best seasonal offers or current best selling offers.

What is the benefit of CPA/PPA

As an affiliate the beauty of this form of advertising is that one of the main hindrances to your success is the fact that in most cases you spend money to advertise a product, work hard to gain a visitors interest and then deliver them to the advertisers website – if they then decide not to make a purchase (which often happens) you make no money at all.

However, because in CPA the offer costs your visitors nothing they are usually far more ready to sign up to the it – so you are more likely to make money. Of course, in most cases the amount you get paid for an offer is quite small, but considering that visitors who click your adverts are already interested in the topic you have a much higher chance of making a profit.

For the vendor CPA campaigns offer these advantages:
a) If visitors don't sign up to the offer, they don't lose any money unlike most advertising.

b) They can gain important information from potential clients very cheaply.
c) If the offer is for a free trial they may be able to turn many of the people who signed up for it into paying customers without spending any more money i.e. instead of paying an affiliate 25% they may only pay for the lead. (some vendors offer a tier payment - paying for both leads and sign-ups)

Types of CPA/PPA

CPA could be one of several types including:

Pay-Per-Lead
– where affiliates get paid once the visitor supplies the vendor with specific information

Pay-Per-Action
– where affiliates get paid when the visitor takes specific action such as signing up for a free trial.
Subscription PPA
- Where the customer signs up to an offer that requires them to make a monthly payment and you get a commission for each month they maintain their subscription.
Second Tier PPA
- In this affiliates get paid a portion if clients delivered by you as an affiliate, recruit other customers to the same offer.

Type of Offer available

As an affiliate, what kind of results need to be accomplished for you to get paid

• Visitor makes a purchase.
• Visitor fills in their phone number.
• Visitor fills in their post code.
• Visitor completes a form.
• Visitor signs up for a free trial.
• Visitor signs up to receive free sample.
• Visitor provides their email address.
• Visitor requests a free quote.
• Visitor completes a survey.

Managing a CPA Campaign

In most cases you will need to set up an online campaign such as Google Adwords to drive targeted traffic to the offer.

You will need to be able to track and monitor your advertising campaign closely to make sure visitors are taking up the offer.

Register with this site to download a free copy of CPA Marketing - an excellent resource for learning CPA here

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