CPA marketing is a type of affiliate marketing that businesses use to promote their products. It’s when you delegate a professional to advertise your product, paying a fixed price for every target action from your audience. These actions are called conversions. Typical types of conversions are signups, downloads, opt-ins, and purchases.
Cost-per-action implies that an advertiser/brand owner only pays when their affiliates’ efforts lead to conversions. This article will explain how CPA marketing works.
What is CPA marketing?
It is a marketing strategy wherein a business finds an affiliate who will promote their products to get conversions. Cost-per-action implies that the business only pays the promoter when a user takes the suggested action, e.g., buying an item, watching a video, filling out a form, or signing up for a newsletter.
How does CPA marketing work?
The process involves three main actors:
- The business or advertiser that owns the product to be advertised.
- The affiliate (also: publisher) that promotes the product to the business’s target audience.
- The CPA network that connects the business and the affiliate marketer.
Let’s say there’s a popular online game named “World of Lovecraft”, and its developer wants to enter a new market in Canada. The developer doesn’t know how to appeal to the Canadian audience, how much ads cost here, and how local competitors promote their games. What the developer does is find a CPA network hosting hundreds of marketers and places an offer on the network. The offer describes the game, its target audience, and what exactly the developer needs: get new players who will register and start a 7-day trial. Here, we have a conversion type — trials.
An affiliate marketer, Jonah, is a passionate gamer. One day, he finds a new offer from his favorite brand in his CPA network. He’s well-skilled in buying traffic from Canada, so he enters this CPA game.
Jonah gets a unique affiliate link from his network and then plans how to send as much quality traffic as possible. He decided to buy PPC ads from Google and some Banner ads from a reputable network named Adsterra. Jonah’s strategy sparks as he gets paid $2,000 for sending 1,000 trials for $2 each.
*We took random figures here, of course.
The above example demonstrates how CPA marketing works.
To Contents ↑Differences between CPA and affiliate marketing
CPA marketing is a subset of affiliate marketing. The difference is that in CPA marketing, the affiliate is paid per specific action, but in typical affiliate marketing, the affiliate is paid for a sale.
In CPA marketing, the action could be a signup, app download, quote request, etc. But, in affiliate marketing, the affiliate only gets paid when they generate a sale.
How to start CPA marketing
The CPA network is the first step in starting CPA marketing for both the advertiser and affiliate marketer.
An advertiser can choose a suitable CPA network, which gives access to vetted pros who can send various types of traffic: SEO, in-app, PPC, Banners, Native traffic, Popunders, etc.
Affiliates will scan through the offer wall to pick deals to promote. Of course, CPA offers with high payouts are the most luring. But often, marketers opt for the deals they are sure of delivering many conversions to.
Joining Adsterra CPA Network as an affiliate marketer puts you a few seconds away from lucrative VPN, Utility, and Sweepstake Offers. Join now and connect with reputable advertisers.
To Contents ↑The main players in CPA marketing
CPA marketing has three core players: advertisers, affiliates, and users.
Advertisers
This is the business with a product it wants to promote. The business has the product and needs customers and seeks affiliate partners to help. The business provides perks and lucrative offers to lure affiliate partners. The main consideration is seeking partners with a good relationship with the business’s target audience.
Users or Traffic
This cohort refers to the customers the business targets. They are the ones whose actions the business pays for, i.e., the target audience.
Choosing the right target audience is essential for the advertisers. You might have a good product, but promoting it to the wrong audience won’t generate good results. You must target the right audience and the best types of conversions.
Affiliates
These are the marketers who know how to reach users. Businesses pay affiliates for their expertise in promoting products and linking them to the right audience. Affiliates present the offers to their audience. In turn, they get paid for every user action they drive for the advertiser.
CPA network terms
Important CPA network terminologies include:
- Commission: The percentage of a sale the affiliate receives for their referral.
- Conversion rate: The percentage of users that take the affiliate’s suggested action.
- Chargeback: The amount deducted when a sale falls through, e.g., the buyer requests a refund.
- Cookies: Text files with small pieces of data that advertisers use to track affiliate referrals. Cookies assign each web page visitor a unique identifier and track if they take the affiliate’s suggested action.
- Cost per action (CPA): The amount the advertiser agrees to pay the affiliate for each action they refer.
- Earnings per click (EPC): The amount the affiliate earns each time someone clicks on their links.
- Return on Investment (ROI): The profit an advertiser generates from their CPA marketing campaign.
How do you calculate CPA?
The CPA marketing formula is simple: the total advertising spend over a specific period/total number of conversions. For example, if you spend $100 on ads and receive 5 conversions, your CPA is 100/5 = $20.
Categories of CPA marketing
There are three main categories of CPA marketing: pay-per-sale, pay-per-action, and recurring payments.
Pay-per-sale
In this case, the advertiser pays the affiliate a percentage of each sale they generate. The affiliate only gets a commission if they generate a sale.
For example, an iGaming platform places an offer on a CPA network, suggesting a $200 payout for every deposit from new subscribers. An affiliate sees the offer and signs up. They convince users to sign up on the iGaming platform and claim the $200 reward for every deposit they drive. Here, the deposit is the conversion.
Pay-per-action
Here, the publisher gets a commission when they generate a specific action for the advertiser. The action could be a website visit, newsletter signup, filling out a contact form, booking a reservation, etc.
Recurring payments
Affiliate programs usually offer a one-time commission for each sale a publisher generates. However, this model offers the publisher recurring commissions if their referred customer makes repeat purchases.
Revenue Share
Revenue share “RevShare” is a model whereby the advertiser shares a percentage of the revenue with the affiliate. Commissions can range from 1% to 75%, or even 90% on some platforms. Commission is calculated based on a customer’s initial purchase plus any upsell they might pay for.
Advantages of CPA marketing
The benefits of this type of marketing for advertisers include:
1. It’s easy to set up
The process of setting up a CPA marketing program is noticeably easy. As an affiliate, you just need to have a pool of traffic sources and a good CPA network to join.
Similarly, advertisers only need to find a suitable CPA network to join, and they can easily find high-quality affiliate partners.
2. No upfront payment
Advertisers don’t need to pay marketers upfront, unlike other forms of marketing. They only pay when the affiliate generates a conversion; this model strictly aligns the interest of the affiliate and advertiser. In most CPA networks, the payment is made only after the advertiser approves the conversion.
3. Higher ROI
CPA marketing generates a higher return on investment because advertisers only pay when the affiliate generates a conversion. This way, they avoid wasting money on digital campaigns that might not even generate conversions in the first place.
The benefits of CPA marketing for affiliates include:
1. High payouts
Affiliates can earn significant revenue by playing their cards right with CPA marketing. CPA ads make much more than typical display ads.
2. Flexibility
You can easily scale your CPA marketing campaigns as traffic on your website or blog increases. There’s little complexity involved; just continue creating good content and attracting users, and you’ll earn higher sales as your traffic grows.
3. Higher conversion rates
CPA campaigns have higher conversion rates than other types of advertising. This happens because you’re marketing products relevant to your audience, unlike display ads that can be chosen randomly for a website.
Consider the below case study of an Australian dating website that earned a 317% return on investment (ROI) from Social Bar ads on the Adsterra CPA Network:
Methods of CPA promotion
The main methods of CPA promotion for affiliates include
Landing page
You can create a landing page that informs visitors about your advertiser’s product. The landing page should use eye-catching visuals and provide detailed information about the product. It should end with a call to action, e.g., “buy now,” “download the app,” “sign up here,” etc.
Frequently, advertisers will provide a landing page, but an affiliate will have to decide whether to lead traffic to this page directly or create a pre-lander. A pre-lander is a web page that appears before the main landing page.
To Contents ↑PPC Ads
You can buy pay-per-click ads to advertise affiliate CPA offers. You can advertise on social media or search engines. As the name suggests, you’ll only pay when people click on your affiliate links, some of whom might convert into customers.
Display Ads
Display ads are visual advertisements that websites insert into their content. You can create a display ad for your affiliate offer and place it through a reputable ad network like Adsterra. Our network gives you access to ad slots on thousands of relevant websites, and you can use different ad formats like Popunders, Social Bar, and In-Page Push.
To Contents ↑Best practices of CPA marketing
Track your campaign performance
Advertisers can’t just deploy a campaign and call it a day. They must constantly monitor the campaign to ensure it’s delivering the expected conversions. If not, it’s a signal to change the campaign settings.
The same considerations apply to affiliates. They must track their campaigns to see if they’re delivering the intended results and make changes if necessary.
To Contents ↑Avoid unreliable CPA networks
Avoid any CPA network with a bad reputation. Check reviews and third-party opinions before choosing any network.
Choosing a shady CPA platform means both the advertiser and affiliate would waste their time and money.
To Contents ↑Beware of fraudulent offers
Affiliates must avoid promoting poor-quality products, e.g., get-rich-quick schemes, illegal gambling and trading, illegal medications, etc. Promoting such schemes can hamper your reputation and cause legal consequences.
Similarly, advertisers should beware of click fraud. Shady affiliate marketers can use bots to generate fake conversions, so always check for unusual patterns, e.g., getting a lot of traffic and little to no conversions.
To Contents ↑Tips for CPA marketing
- Affiliates should design an appealing landing page to hook the viewer’s attention. The page should contain clear information about the product you are selling.
- Affiliates must collaborate with advertisers relevant to their target audience and vice versa. There’s no need for any collaboration where the audience doesn’t align.
- Advertisers can hire a knowledgeable affiliate manager who has experience in managing campaigns. This advice mainly applies to first-time advertisers with little experience in CPA campaigns. An affiliate manager can guide you through the process and ensure you don’t make unnecessary mistakes.
Top CPA networks for affiliates
The best CPA networks include:
Adsterra CPA Network
Adsterra is best known as a display advertising network but also runs one of the best CPA networks. This network only works with reputed advertisers with high-quality offers. It offers bi-weekly payouts to affiliates, which is faster than most networks offer.
Adsterra CPA provides high-quality support to all partners. Every affiliate has access to 24/7 expert support and can ask Adsterra’s staff any relevant questions they have.
The top niches for this network include Antivirus, Utility, iGaming, Games, VPN, Software, Dating, and Sweepstakes. Adsterra gives bi-weekly payouts after verifying your traffic. But, trusted affiliates with large, quality traffic can get paid twice weekly.
Adsterra makes affiliate marketing as seamless as possible for both affiliate marketers and advertisers. We guide webmasters in maximizing their revenue.
To Contents ↑MaxBounty
MaxBounty is one of the oldest affiliate networks, having launched in 2004. Affiliates can sign up and choose from over 3,000 campaigns from reputable advertisers. Affiliates receive payments every week to replenish their budgets. You can monitor affiliate earnings from an interactive dashboard.
To Contents ↑CPAlead
CPAlead is a CPA network that focuses on app installations. Affiliates can sign up and choose apps to advertise to their audience; you’ll get paid for each app install you generate. Affiliates can receive their payments every 24 hours.
Similarly, app developers can join CPAlead and find expert affiliate partners to work with. CPAlead works with some of the biggest brands, such as Amazon, Spotify, Rovio, JPMorgan Chase, and Samsung.
To Contents ↑How to qualify for CPA networks as an affiliate marketer
The tips for affiliate marketers to get accepted by ad networks include:
Don’t skip surveys
Many CPA networks will send you a short survey to fill out after you apply to join. The goal of this survey is to identify your strengths as an affiliate marketer and demonstrate if you’re determined to work with them. Ensure you fill out these surveys promptly if you get one.
To Contents ↑Be honest
Be truthful when asked to provide details about your affiliate marketing efforts. What type of offers do you want? What’s your target revenue? Do you have previous affiliate marketing experience? These are the types of questions to expect. Answer them honestly to help the CPA platform determine if you’re a good fit. People can lie to get their foot in the door, but delivering good results will be difficult.
To Contents ↑CPA marketing — FAQs
Yes, CPA marketing remains profitable. Affiliates can find relevant offers and promote them to target audiences. They’ll earn fees for every conversion they generate, which can be significant if their campaigns generate many conversions.
The first step to begin CPA marketing is to define your skills in driving traffic and your preferable niche (e.g., software or apps promotion). After defining a target audience, you can apply to CPA networks, find relevant offers to promote and earn money for every conversion you drive.
The best method of CPA marketing depends on what you’re expert in. Many pros will consider buying traffic as the most promising method. Getting traffic this way is easier than building a website, writing frequent content, and waiting till you amass significant viewership before starting CPA marketing.
None is inherently better; it depends on what you want as an advertiser. If you’re chasing e-commerce sales, traditional affiliate marketing is better because you only pay commissions when you make a sale. But, if you’re chasing other conversions such as downloads, sign-ups, and free trials, CPA marketing is the better option.
It involves three main factors: the affiliate, advertiser, and CPA network.
The affiliate is someone who knows how to get quality ad views, clicks, and conversions from various traffic sources. The advertiser is the business that wants to reach out to the audience. The CPA network is the platform that connects the affiliate and the advertiser.
There’s no specific amount you can make from CPA marketing. It depends on many factors, including your niche, audience size, type of content, type of advertisers, etc. The good news is that there’s no limit; you can earn as much as possible if you play your cards correctly.
Take, for example, this content creator who earned $4000 by advertising iGaming CPA offers on their website:
Conclusion
We have explained cost-per-action marketing in detail. We’ve explained how it works, its benefits, and best practices. We also provided cost-per-action marketing tips for advertisers and affiliates.
The most important part of CPA marketing is choosing the right network. No matter how skilled and experienced you are, choosing the wrong platform will make your efforts futile. The good news is that Adsterra CPA is one of the best networks you can join in a few steps and find offers from trusted advertisers.
