Ad Model case study

CPA
CPA : Cost per Action
What if instead of focusing your digital ad spend on “awareness-metrics” like
impressions and clicks, you could spend your money only on real business
results – leads, conversions, and sales?

 CPA marketing, also known as cost per action marketing, is a style of the affiliate
marketing model that offers a commission to the affiliate when a specific action is
completed.
 The lead action can be anything from making a purchase to getting a quote, watching a
video, or filling out a form.
 CPA networks then promote these campaigns through affiliates.
 The CPA affiliates are paid a set fee each time a referred visitor completes the action or
offer.
 Ecommerce sites around the globe can leverage CPA marketing to create different offers
and online marketing campaigns.
How CPA Work:
 Affiliate or Publisher: The influencer (blogger, brand, business) that promotes a business or
product in order to drive traffic to the ecommerce site and make a specific conversion.
 Business or Advertiser: The brand that desires a partnership with an affiliate to drive
quality traffic to the business’ website and increase sales, generate leads, or boost
conversions.
 CPA Network: The platform that brings together the affiliate who wants to make money by
promoting products and the businesses that want their products promoted.

***Lisa(has a healthy following of YouTube subscribers and blog readers), a cooking

blogger (affiliate) trying new recipes and recommending specific brands and products
to her audience . Due to popularity her cooking crowd is eager to buy the next
kitchen gadget she recommends.
***Easy-Cooking manufactures(Advertiser) high-quality kitchen gadgets ,want to
expand their marketing reach and would love to take advantage of Lisa’s audience of
budding chefs.
***A CPA marketing network brings Lisa and Easy-Cooking together.
Lisa sends her audience to the
business’ website and makes a
commission on each sale or lead
conversion.

In turn, Easy-Cooking makes

money from Lisa’s referral
traffic.

The network brings them

together and the audience gets to
try new products and learn about
emerging brands. It’s a win-win
CPA Marketing Payment Model:
 The CPA affiliate marketing method is advantageous for businesses because they don’t pay
unless a successful conversion is made.
 The cost per action for an advertiser can be determined by dividing the total cost of the marketing campaign by the number of successful
actions taken.
 If Easy-Cooking spends $1,000 on a marketing campaign and gains 25 successful conversions on a signup form for a recipe ebook, the
cost per action is $40.

 the average AdSense rates in India range from Rs.100 to Rs.150 CPA per action.
 The payouts differ based on competition and average commission rates in each vertical. Google AdWords reports the
average cost per action across all industries is $48.96.
 The automotive industry has the lowest CPA at $33.52.
 While Technology has the highest CPA at $133.52
Calculation of CPA:
For which industry:
 For advertisers:
 CPA marketing just might be the most scalable and ROI-positive way to monetize the website.
The brand can hand-pick the action they consider meaningful and reward the influencer accordingly.

ie. engaging with the social media post, filling up a form.

 it fits every brand, irrespective of size!

A homegrown company with a small budget gets the peace of mind that every penny invested is on an actionable result.

It’s a good form of advertising for those who have a well-developed market, they assured that they’ll be able to quantify roas.

 High ROI:
these types of marketing campaigns drive a better quality of traffic and offers a better value than most traffic sources.

 For Publishers:
 The very-limited risk that advertisers face can make CPA easier for publishers to sell than CPM and CPC.
 This can keep advertisers tied to an ad sales program longer
Creating an effective CPL or CPA program requires an investment of time and resources from both advertisers and publishers ..

 affiliates in advertisers niche usually performs better & hence got commission bonuses and high incentives as pricing for CPA
is comparatively high.
Ad Formats for a CPA
 CPA marketing is becoming a popular solution for companies in the nutrition, gaming,
and retail industries.
 CPA affiliate required to provide filling out a form, submitting a request, traffic, leads, or
even generate sales in order to receive payment.
 top ad formats CPA offers:
 Native Ads:This format employs adverts that look like part of a website’s original content, hence
users are not aware they’re interacting with an ad, which usually provides a boost in performance.
 Push Notifications: these notifications can bring a message without making consumers feel like
they are being sold something. Instead, they come off as friendly reminders that bring value to the
product we’re promoting.
 Pop-Under Ads: we can use pop ads to build outstanding campaigns.
CPA Marketing Trends:

 CPA marketing is expected to expand to developing countries in 2021 and beyond.

 Influencer marketing will begin to overlap into CPA marketing, giving many new
ecommerce businesses even more reason to join CPA affiliate networks
 Ecommerce businesses will shift a portion of their budget from traditional marketing (PPC,
social media, and banner ads) to affiliate and performance marketing.
 CPA marketing is the next step in digital marketing that ROI-minded marketers are looking
for.
 Sources:
 CPA Marketing in 2021
 Best ads formats CPA offer
 Why brands are leaning towards CPA model for influencer marketing
 CPA Advertising
 Advantage