Cost per acquisition ( CPA ), also known as "Cost-per-action" or pay-per-acquisition ( PPA ) and cost per conversion , is an online advertising pricing model in which an advertiser pays for certain acquisitions - such as sales, clicks, or form submissions (e.g., contact requests, newsletter signups, signups, etc.)
Direct response advertisers often find BPA the optimal way to buy online advertising, because advertisers only pay for advertising when the desired acquisition has taken place. The desired acquisition is to be determined by the advertiser. In affiliate marketing, this means that advertisers only pay affiliates to prospects who generate desired actions like sales. This eliminates the risk for advertisers because they know in advance that they do not have to pay for bad referrals, and encourage affiliates to post good references.
Radio and TV stations sometimes offer unsold inventory on a cost-per-acquisition basis, but this form of advertising is most often referred to as "per question". Although less common, print media is sometimes also sold on a CPA basis.
Video Cost per action
CPA as "cost per acquisition"
CPA is sometimes referred to as "cost-per-acquisition", which is related to the fact that many CPA bids by advertisers are about getting something (usually a new customer by making a sale).
The formula to calculate cost-per-acquisition
Cost per acquisition (CPA) is calculated as: the cost divided by the number of acquisitions. So for example, if someone spends Ã, £ 150 for a campaign and gets 10 "acquisitions", this will give a cost per acquisition of Ã, Â £ 15.
Maps Cost per action
Pay per lead
Pay per lead (PPL) is a form of cost per acquisition, with "acquisition" in this case is the sending of prospects. Online and offline advertising payment models where charges are charged only on the delivery of leads.
In a pay-per-party agreement, advertisers only pay for instructions submitted under the terms of the agreement. There are no payments made to prospects that do not meet the agreed criteria.
Prospects can be sent by phone under the pay-per-call model. Instead, prospects can be sent electronically, such as by email, SMS or ping/post data directly to the database. The information conveyed may only be an email address, or it may involve detailed profiles including multiple contact points and answers to qualifying questions.
There are many risks associated with Pay Per Lead campaigns, including potential fraudulent activity by incentive marketing partners. Some fraudulent leads are easily recognizable. However, it is advisable to conduct a routine audit of the results.
Difference between CPA and CPL ads
In a cost-per-lead campaign, the advertiser pays for an interested lead (hence, cost per lead) - that is, the contact information of the person interested in the advertiser's product or service. CPL campaigns are suitable for brand marketers and direct response marketers who want to engage consumers at multiple contact points - by creating bulletin lists, community sites, prize programs, or member acquisition programs.
In CPA campaigns, advertisers usually pay for a completed sale involving credit card transactions.
There are other important differentiators:
- CPA and affiliate marketing campaigns are centered on publishers. Advertisers give up control where their brand will appear, when publishers look for offers and choose who runs on their websites. Advertisers generally do not know where their offer goes.
- CPL campaigns are typically high-volume and lightweight. In CPL campaigns, consumers only send basic contact information. Transactions can be as simple as an email address. On the other hand, CPA campaigns are usually low-volume and complex. Typically, consumers must submit credit cards and other detailed information.
PPC or CPC campaigns
Pay-per-click (PPC) and cost-per-click (CPC) are both a CPA (cost per action) form with actions being clicks. PPC is generally used to refer to paid search marketing like Google AdSense or Ad Words. Advertisers pay each time someone clicks on their text ad or display ad.
Cost per click on the other hand is commonly used for other things including email marketing, display, contextual, and more.
Also, pay per download (PPD) is another form of CPA, in which the user completes the action to download the specified file.
Tracking CPA campaigns
With CPA campaign payments on "actions" being delivered, accurate tracking is very important for media owners.
This is a complex subject in itself, but if it is usually done in three main ways:
- Cookie tracking - when a media owner moves a click, a cookie is dropped onto a prospect's computer that connects back to the media owner when "action" is performed.
- Phone tracking - unique phone numbers are used per campaign instance. So media owners XYZ will have their own unique phone number for an offer and when this number is called the resulting "action" is allocated to the XYZ media owner. Often the payment is based on the length of the call (usually 90 seconds) - if the call lasts 90 seconds, it appears that there is genuine interest and the "prospect" is paid.
- Promotional codes - promotional codes or coupons are commonly used to track retail campaigns. The prospect is asked to use the code at the checkout to qualify for the offer. The code can then be reconciled with media owners who drive sales.
Cost-per-action effective
Related terms, cost-per-action effective (eCPA), are used to measure the effectiveness of the ad inventory purchased (by advertisers) through cost-per-click, cost-per-impression, or cost per thousand basis.
In other words, eCPA tells advertisers what they're willing to pay if they have purchased ad inventory on a per-action basis (not cost per click, cost-per-impression, or cost per thousand/thousand bases).
If an advertiser buys inventory with a target CPA instead of paying per action at a flat rate, the goal of an effective CPA (eCPA) must always be below the maximum CPA. As explained by Yang's Law, eCPA & lt; CPA . A fundamental view of what the performance of a conversion-based campaign should be presented as the basis for many buy-side platform optimization algorithms.
References
Source of the article : Wikipedia
0 Comments