CPA MARKETING B-1

 CPA Marketing: How It Works & How to Build an Effective Strategy

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What is CPA Marketing?

CPA, otherwise known as cost per action or cost per acquisition, is an advertising or affiliate marketing model that involves paying your CPA partners a determined commission after a sale occurs or a desired action is completed. With the right affiliates and the right audience, CPA marketing can effectively deliver results. Instead of just driving impressions and clicks, CPA marketing can generate leads and push conversions, enabling businesses to scale up. 

For affiliates, CPA marketing can expand their potential to earn through advertising. Most affiliate marketers partner with different companies in order to diversify their content and CPA offers, which allows them to provide options for their followers or site visitors and various solutions to their distinct pain points. 

CPA marketing has three main categories:

🔍  Pay per Sale

As the term suggests, pay per sale is when you, the marketer, are paid when a visitor uses your affiliate link and makes a purchase through your partner website.

🔍  Pay per Action

Affiliates get paid for the leads they’ve generated. Pay per action involves a set of actions that a visitor must perform or complete, such as watching a video, filling out a form, or signing up for a free trial.

🔍  Recurring Payments

If you can regularly attract new subscribers to your partner website, you’d be able to get regular commissions from the monthly subscription fees.

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CPA Networks

CPA networks act as a bridge that links advertisers and publishers. They specialize in implementing cost-per-action campaigns and are the agencies that determine whether or not you’re a legitimate business that can send qualified leads to them. 

Because the premise of making money online without necessarily selling something is so appealing, CPA marketing tends to be exploited. Because of their strict criteria and requirements, joining CPA networks can be challenging. However, it’s not impossible. The key here is to be transparent and take proactive measures that can help you get accepted.

CPA networks aren’t just for experienced affiliate marketers. They’re great for beginners as well. And while joining one can be a bit tricky, it does have a lot of benefits, including:

✅  Relatively high payouts

✅  Low barrier to entry—affiliate marketers can start with little to no upfront investment

✅  A wealth of CPA offers

✅  Listings that you can filter according to your expertise or niche

3 Tips on How to Get Accepted by a CPA Network as an Affiliate Marketer

🗝Create a website

If you don’t have a website yet, now is the best time to create one. Construct a website that reflects your brand and your skills and experience as an affiliate marketer. You can use WordPress, which is an open source and easy to use CMS platform. Alternatively, you can hire someone else to create and design your website. 

 Use your domain name in your email

You might also want to consider creating an email that includes your domain name and looks like this: “yourname@yourdomain.com”. Some CPA networks might instantly reject applications that use a free email address, as these are easy to create and don’t provide verification that you actually own the website. 

🗝Start with your local CPA networks

If you’re just starting out, it’s a good idea to start applying to local or smaller CPA networks. You can apply for the bigger and more popular ones once you’ve gained enough experience with CPA marketing. Bigger CPA networks also typically receive a large number of applications, which can make it more grueling for you to get in. 

Once you get accepted to a CPA network, you can start browsing for offers that fit your niche. After selecting the offers, you can start promoting them on your website. 

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CPA Niches

Whether you’re starting a blog or selling on Amazon, focusing on a niche is one of the most effective ways to gain organic traffic while establishing yourself as a subject matter expert. 

Not every niche has the potential to be profitable. As an affiliate marketer, you have to find a lucrative niche where you can excel at. Here are some of the top CPA marketing niches that are worth considering:

💯  Mobile apps

💯  Health

💯  Finance

💯  Relationship

💯  Jobs or Career

Given that these are broad categories, you can opt to choose smaller sub-niches to create more personalized content. For example, if you’ve chosen the health niche, you can focus on sub-niches such as weight loss, fitness, or skincare. 

CPA Network Terminology

To get started with affiliate marketing, you need to be familiar with basic terminology and key metrics so you can measure the success of your campaigns:

Affiliate Agreement: A contract stating the terms of the affiliate relationship between the advertiser and publisher. The agreement specifies each party’s responsibilities and the commission a publisher receives in the event of a sale (typically a fixed percentage of the sale price).

Above the fold: Content on a website that is visible without needing to scroll down. Because of its high visibility, “above the fold” is considered the most desirable (and expensive) spot for placing advertisements. 

Chargeback: When a commission is deducted because a sale fell through (i.e. the item was returned or the customer requested a refund). 

Commission: A percentage of the sale price of a product that is paid to the affiliate for an attributed conversion. 

Cookies: Cookies allow advertisers to track which affiliate deserves credit for a sale. Cookies assign each website visitor a unique identifier and track actions they take on the website, such as clicking an affiliate link.

Contextual link: A text link placed within an affiliate website that leads back to the advertiser’s website. 

Conversion rate: The percentage rate of website visitors that turn into customers divided by the total traffic. 

Cost Per Action (CPA): The cost of advertising divided by the number of actions taken. For example, if a business spends $150 on a campaign and there are 10 actions associated with that campaign, the cost per action is $15. 

Cost Per Lead (CPL): The amount of money it takes to generate a new prospective customer for your sales team. Say you spend $1000 on a PPC campaign and 10 users convert into leads, then your CPL is $100. 

Earnings Per Click (EPC): The average amount of money you earn each time someone clicks one of your affiliate links. Calculated as total earnings over period “x” divided by the number of clicks over period “x.” 

Offer page: The webpage where the conversion occurs after a customer takes the required action.  

Return on Investment (ROI): The profit generated from an affiliate campaign divided by the ad spend, multiplied by 100.

Benefits of CPA Marketing

CPA marketing works because it affords advertisers access to a broad audience while maximizing return on ad spend (ROAS). 

Integrated advertising.

By partnering with publishers, you can build product awareness with a wider audience. Content creators and influencers tend to have audiences that trust them, so promoting your products on their site helps build brand awareness and reputation. 

High ROI.

CPA marketing is affordable because you only pay a commission if a sale is made, which creates a high return on investment. Commissions can be a flat rate or a percentage of the sale price.

Low risk.

CPA marketing is a low-risk form of affiliate marketing because you only pay when you receive a conversion. This ensures any referrals you receive generate value while vastly reducing the chances of an affiliate gaming the system to artificially inflate clicks or website traffic. 

Easy to use.

A CPA marketing campaign is easy to set up — simply choose a CPA network and an offer to get started — with a low upfront cost. You can appoint an affiliate manager to negotiate affiliate agreements on your behalf and have commissions paid automatically by your chosen payment processor.

What’s considered to be a “good” CPA in marketing?

While there are no definite figures for what a “good” CPA is, you should work toward a CPA that allows you to maximize your profit while reaching a wider audience.

For example: you’re paying a CPA cost of $50 for a product that’s priced at $100—this might seem like a good deal, but you need to factor in other costs, such as materials and manufacturing, which can push the total CPA cost to, say, $150. This means that you’re shelling out $150 for a product that is worth only $100, incurring a loss of $50.

Is CPA marketing still profitable in 2023?

Yes, it’s still profitable in 2023 and beyond, as long as you’re able to target the right audience and build relationships with the right influencers for your brand.

How much can I potentially earn from CPA marketing?

With CPA marketing, your potential revenue will largely depend on how much work you put in. Single conversions, for example, can range anywhere from $0.10 to $10. Rates can go higher, especially in cases where users are required to share their credit card details for a product trial.

If we’re looking at monthly earnings, you can earn as much as $1,000. The key to earning more is to be consistent with running your campaigns, testing, promoting, and optimizing your CPA offers.

Which is better for my business: CPA marketing or affiliate marketing?

CPA marketing and affiliate marketing both have their pros and cons. Some advantages of CPA marketing include high ROI and relatively low risk. However, it may pay less than affiliate marketing.

The great thing about making money online is you don’t have to be limited to only CPA marketing or affiliate (also known as cost-per-scale model) marketing. If you’re just starting out, you can use CPA marketing for your business, especially if you don’t yet have a consistent source of traffic. Once you’ve built an audience, you can start venturing into affiliate marketing.

What factors are involved in the CPA Marketing Model?

Four factors are mainly involved in the CPA marketing model. These include: the publisher or affiliate, the advertiser or brand, the CPA network, and the consumer.