Cost per Action or CPA is an online marketing strategy and advertising model wherein an advertiser pays only when a user viewing the ad performs a specific action. This action, determined by the advertiser, may range from a simple click to form submission and purchases. As the advertiser is obliged to pay only when the desired action occurs, CPA is considered an ideal online advertising strategy. Because of this, CPA is often called Pay Per Action. But CPA is often referred to as Cost per Acquisition because most advertisers using this strategy aim to make people purchase something. |
Clicks versus Action
Commonly, web site performance is determined by measuring the number of clicks made on the site. The number of clicks leading to into the site as well as within the site indicates if web traffic is heavy or not. In such conditions, high traffic websites perform well. However, in the cost per action model, clicks don't matter as much as the actions made by the users within the website. In CPA advertising, a website's performance is gauged by how many times user performs a pre-determined action. Typically, these actions involve the purchase of products or services, downloads, travel bookings, email and newsletter sign ups, video views and more.
Compared to pay per click, CPA or cost per action is a more accurate way to determine the performance as advertisers pay for the exact results that they are looking for. And because the advertiser only pays when a user performs an action, they can manage allocate their resources better and adjust the budget when it is necessary. Ideally, advertisers should figure out how much money they are willing to spend on CPA before using it.
CPA and CPL
Cost per Lead or CPL is another online marketing technique related to CPA but with a marked difference. In CPL, the advertiser pays for an interest lead given by a user while in a CPA strategy the advertiser pays for a specific action performed by the user. In CPL, the goal is to get information from the users to give the advertiser an idea on the kind of market interested in their products or services. There are two fundamental differences between CPA and CPL:
One, CPL campaigns are controlled more by their advertisers. The advertiser decides which websites their ads should appear on. Meanwhile, CPA campaigns are more publisher-centric. This means that the publishers are the ones who choose the advertiser and the ads that they want to display on their websites.
Two, CPL campaigns are typically lightweight and high-volume-they often require only basic information from the users such as name and email address. On the other hands, CPA campaigns usually require more details like age, gender, address and often, credit card information.
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