Cost per action (CPA) allows business owners to only pay for specific actions that people perform based on their ad. This is practically useful if they want to control how much they pay for specified actions.
When it comes to marketing any business online, it’s important to take note of your return on investment (ROI) as this is a determinant of your success or failure.
Take, for instance, the digital advertising world. Advertisers place a substantial amount of money into Google or Facebook ads. They then must rapidly optimize such campaigns all in the hope of converting every click into sales.
It’s not difficult to see that as soon as you factor in gross profit margin alongside possible shipping costs and other expenses, it’s hard to achieve a decent return on investment to scale your marketing expenses.
This is where advertisers can leverage the prowess of Cost per action marketing.
CPA marketing gives advertisers the ability to only pay after a conversion occurs and at a predetermined rate by the advertiser. This is its major difference from other marketing strategies. With other marketing strategies, advertisers pay to advertise their brand with little or no assurance of conversion.
What is CPA Marketing?
CPA marketing, also known as cost-per-action marketing, is a variation of the affiliate marketing strategy. Cost-per-action marketing offers commission to an affiliate when a specific action is completed. The specified action can range from filling out a form to watching a video or even buying an item.
The Cost per action affiliates is paid a set fee each time a referred visitor completes the action or offer.
To put things in perspective, consider a salesperson selling clothing accessories.
If she sells a pair of socks for $20 and she pays her CPA partners a 10% commission after the sale. She only pays $2 in marketing expense and enjoys a return on ad spend (ROAS) of 2:1. This is considered an impressive return on investment.
How Cost per action Marketing Work?
The Cost per action model is a simple and straightforward concept. We will explore how it works and who is involved in the next few lines.
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The Affiliate or Publisher:
This is the person, blogger, brand, or business that promotes other businesses or products in order to drive traffic to the advertiser’s site and generate a specific conversion.
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Business or Advertiser:
The brand (Advertiser) desires a partnership with an affiliate to drive quality traffic to the business’ website and increase sales generate leads or boost conversions.
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CPA Network:
The platform links the affiliate who wants to make money by marketing products and the businesses that want their products marketed.
Taking a cue from our above example, let’s say a popular fashion blogger named Betty (the affiliate in this story) enjoys an appreciable amount of YouTube subscribers and blog readers.
Over the years, she has developed her blog by building cult-like followership with increased web traffic. She also constantly recommends specific brands and products to her audience who are always eager for her next recommendation.
Now consider a business named fashion house.
fashion house produces high-quality clothing fabrics ranging from shirts to pants, trousers, shorts, and lingerie. the fashion house is looking to increase its marketing reach and would love to take advantage of Betty’s audience of fashion-savvy enthusiasts.
A Cost per action marketing network then links Betty with fashion house. Affiliates such as Betty can make money by engaging in what they do best; engaging their audience, and making recommendations.
They can turn to Cost per action networks to find companies who are willing to pay them to use and promote their products or services.
Betty simply recommends sends the business’ website to her audience and earns a commission on each sale or lead conversion. Likewise, FashionHouse makes money from Betty’s referral traffic.
Talk of a win-win solution for everyone.
Cost per action Marketing Payment
Basically, the pay-out of Cost per action marketing is based on competition and the average commission rates in each niche. This brings about the difference in pay. The cost per action for an advertiser can easily be calculated by dividing the total cost of a marketing campaign by the number of successful conversions.
While the cost per action varies by industry, Google AdWords reports the average cost per action across all industries at $48.96. The automotive industry has the lowest CPA of $33.52 and the technology industry has the highest CPA of $133.52.
Why should I use CPA Marketing?
Cost per action marketing is highly profitable when you connect with awesome influencers for your business and target quality audience. When compared to other online marketing methods, the cost per action formula offers numerous benefits which you should consider:
Easy to set up
Cost per action marketing is relatively easy to set-up. All that is needed is a website and a CPA network. Also, it requires comparatively low capital to start using this marketing technique.
By partnering with a trusted CPA affiliate network, you don’t need to worry as to how to get started.
Pay After conversion
In Cost per action marketing, advertisers only pay for traffic that offered conversion. So if traffic doesn’t provide conversion, advertisers don’t pay.
If and when an affiliate’s referrals continually offer low conversion rates, it is advised to diversify your affiliates. Or better still; shift your focus to a more successful affiliate.
Low Risk
Since no payment is made to the publisher unless a referred visitor completes a specific task, the risk is low for online businesses.
You can as well make use of tools like Mentionlytics that can help you monitor how the affiliate is marketing your brand or product.
High ROI
According to Conversant’s Affiliate Customer Insights, customers spend more money when purchasing off an affiliate’s recommendation.
This means that Cost per action marketing campaigns drives the decent quality of traffic and offers a better value than most traffic sources.
Affiliate marketing produces:
- 58% higher average customer revenue.
- 31% higher per customer order average.
- 21% higher average order value (AOV).
Increase Marketing Reach
Cost-per-action marketing rewards you with the true market standings of your product or services. It helps you put into perspective, your scaling and distribution decision.
You get to scale your brand message faster and more consistently to the largest possible audience.
Whatever niche your brand is in, you can utilize Cost per action marketing to expand.
Infusing CPA Marketing with Facebook
As of today, a sizeable number of earth’s human population are on Facebook with rich demography. Facebook allows its users to see your posts and updates, interact with them by liking or commenting and also share them. With Facebook’s recent algorithm, the more genuine interactions you can muster, the more the post will be seen by others. Genuine and unique posts and ads can then translate to profitable Cost per action conversion.
Create a Page
On Facebook, a page operates very similarly to a group, although there is diminished interaction with a page. Groups, by their design, tend to encourage interaction. Pages lean towards keeping your audience updated about your newest content.
If you have an active blog, then you should seriously consider opening a Facebook page for it. This is an awesome means of promoting your blog posts, affiliate links, and other noteworthy information.
Also, pages are more straightforward to handle, unlike groups which can sometimes be tedious to manage. If you can continually post unique content for your audience, then you’ll be able to get them equally engaged. You can also ask questions or reply to them, share videos as well as a link to your Cost per action posts or straight to specific products and services.
Use Your Personal Page
This is a textbook maneuver and is quite literally the simplest way to start Cost per action marketing on Facebook. Sadly, it’s also the least effective. Surely, you’ll have a group of people who know, trust you, and will see your posts, but there is no guarantee that they may want to consistently buy from you.
A possible solution to this is to market your Cost per action posts in a less overly promotional or sales-oriented manner. Try mixing your updates and see what catches on or not. Keep a close eye on the wordings of your posts, the links you post, and the types of posts that get the most interactions.
Whether you are using a page, a group, or your personal profiles, you want your post to be educational, informative, entertaining, and not all promotional. You can use the 80/20 rule.
This will create as much value as possible for your audience with regard to each post.
Create a Facebook Group
The first step to creating a flourishing Facebook group is choosing your niche. This is important the niche will determine your content type. And your content will largely determine your audience.
When creating posts on your group page, it’s important to ensure that such content resonates with your ideal audience. Know the demographics of the people you’re targeting so that you can promote the right kinds of products and services to them.
It’s advisable not to only post products that earn you a commission. This often appears as scams. Rather, try to provide useful information in posts, with all not affiliate links related. When users view your group page and see that you promote a variety of products and services, only then can they put more trust in your opinion and view you as honest.
Your Facebook group can start with a few friends and grow your way up from there. Your friends will most likely trust you and your opinion. Their interaction and shares will give you the necessary publicity and will help you reach new audiences.
Facebook Ads
Using Facebook ads does have an impact on your reach online as well as increasing the effectiveness of your Cost per action marketing. Facebook maintains a rigorous set of guidelines as to what your ad can contain. And oftentimes, requires submission of an ad placement request more than once.
Just a few well-placed ads can help you build an engaged audience in a short space of time. With near 2 billion active users and a solid yet heart-breaking ads platform, you can narrow down your ad to basic demographics such as age, gender, and country.
Be specific about the type of audience you want and you’re likely going to see a return on investment (ROI) from your Cost per action marketing.
Your ads can promote certain products and affiliate links if you’d like, but they’re also powerful when used in conjunction with a blog. Don’t forget that humans are visual creatures, and Facebook can often flood people with content. So keep your images conspicuous and engaging enough to maximize sales.
Top CPA Affiliate Networks
Only services that provide seasoned affiliate managers, a variety of offers, and competitive pay-outs should be tried. Using Cost per action affiliate networks with bad reviews won’t hold well for both the business to be promoted as well as the promoter or affiliate.
We will mention some reputable CPA affiliate networks to help guide you.
Admitad
Admitad was launched in 2009 in Germany and hosts international offers, giving it a huge presence across businesses. It has well over 520,000 publishers and more than 1,200 advertisers.
Minimum pay-outs for affiliates on Admitad is set at $10 and can be paid via PayPal, e-payments, and wire transfer. This network also offers anti-fraud protection technologies, cross-device tracking, and deep linking options to its subscribers.
Admitad boasts of personalized training and other learning options with a client-oriented approach.
Clickbooth
Clickbooth is one of the longest Costs per action affiliate networks with a firm view on making its services easy and innovative to users. It was launched in 2002. Clickbooth is a free service to join as an advertiser.
Advertisers have the ability to view traffic performance from each individual affiliate, manage budgets, campaigns and pay-outs themselves or allow the Clickbooth team to do all the work.
Clickbooth holds the claim that its artificial intelligence technology is able to provide up to 25% increased earnings per click (EPC) for affiliate partners.
MaxBounty
MaxBounty offers trained affiliate managers whose main aim is to focus on business marketing needs. Newcomers on this platform undergo serious training with dozens of training materials.
There are roughly 20,000 affiliates on MaxBounty. Its affiliate managers are smart about which partners will be of best fit to businesses and affiliate marketers.
Affiliates offer high-quality traffic to the merchant’s site after passing verification. Better still, they offer weekly pay-outs.
Conclusion
Cost per action marketing is the next big deal in digital marketing. If you want to increase your blog’s reach while maintaining a pleasant return on investment, then you should infuse Cost per action marketing into your marketing strategies.
Facebook offers a wonderful platform for you to grow your CPA and hence increase ROI. But this requires you to consistently build your audience and trust to achieve long-term success.
Tracking your cost per action will inform you just how well you are doing in connecting with your Facebook audience. Ultimately, this will keep you in control of the amount you spend on your ads.
