CPA affiliate marketing began as a trend in the revenue sharing business. Over a relatively short period of time, that trend has grown to become a widely-implemented online marketing phenomenon. Because it brings benefits to both merchants and affiliates that sometimes exceed those offered by traditional PPC marketing, it offers a good option for parties on both sides of the marketing coin.
What is CPA Affiliate Marketing?
Cost per action (CPA) affiliate marketing enables website owners to earn money by sending traffic from a third-party site to a vendor site. The website owner gets paid when a visitor takes a desired action with the vendor. Desired actions may include filling out a form, downloading a white paper or registering an email address. There are three primary parties involved in the CPA affiliate marketing process:
- Merchants—A merchant is the company or website seeking to market its services through the affiliate network.
- Affiliates—Affiliates, also known as publishers, are third-party website owners who provide advertising for merchant sites and receive payment for each desired action taken.
- CPA Affiliate Networks—Networks act as liaison between affiliates and merchants. Affiliates who join the network gain access to offer information and can determine which programs will be most beneficial for them. Merchants also benefit from CPA affiliate networks, since they gain access to the most competent and motivated affiliates.
At first glance, the two approaches appear quite similar. Both rely on third-party marketing efforts, and both offer monetary compensation to the publisher for promoting a merchant site. The difference, however, is that while PPC campaigns pay for every click, CPA marketing pays only for those clicks that result in a desired action being taken on the merchant site. That means the entire process becomes more profitable for the merchant, since he is paying only for those actions that benefit his business. Affiliates also benefit (when they can deliver converting traffic), since these offers typically pay more per action than traditional PPC marketing offers.
What are the Benefits of CPA Marketing?
Both merchants and affiliates benefit from the unique approach of CPA affiliate marketing. Benefits from the merchant’s perspective include:
- Reduced risk
One of the frustrations experienced by many small business owners when first starting out in PPC marketing is that advertising costs can exceed returns. Because marketers pay for every click in a PPC marketing campaign, costs can quickly skyrocket as the advertising generates clicks that bring no benefit to the company. With CPA affiliate marketing, however, merchants pay only for those clicks that bring actual results, reducing the level of risk involved up front.
- More quality leads
Because affiliates get paid only when a visitor takes a desired action on the merchant’s site, they will be more motivated to target their SEO efforts toward promoting specific keywords. In order to take advantage of the leads generated, however, merchants will also need to build effective landing pages that draw people in and encourage them to take action.
- Merchants pay only for completed actions
Not only does this make the entire model more beneficial for merchants, but it also provides strong motivation to build excellent landing pages. The better the landing page, the more likely the visitor is to take the desired action. And once that action has been taken, the likelihood of the lead becoming a sale increases significantly.
CPA marketing offers several key benefits from the affiliate’s perspective as well:
- Ability to monetize an existing website
Web 2.0 has provided opportunities for average people to develop their online presence using personal blogs, informational websites, and video. For these people, CPA affiliate marketing can be a great way to monetize a website and receive compensation for doing the things they already enjoy doing.
- Higher pay
Because CPA marketing pays only for completed actions, most merchants will pay significantly more than they will for PPC advertising. Some offers pay $30 or more per action, depending on the purpose and goals of the merchant.
- Increased opportunities through affiliate networks.
Affiliate networks put publishers in touch with the best available offers while also cutting down on spammers. Most networks are picky about who gets approved, unlike PPC programs where almost all applicants get accepted. This means that members can generally count on better offers and more serious vendors, since merchants know they’ll be getting quality results for their investment.
The Downsides of CPA Affiliate Marketing
Merchants promoting products with CPA will have to spend more time choosing their affiliates and tuning their advertising than is often the case in other forms of marketing. Not all products are suitable for CPA marketing, and the fact that merchants need to pay more for each lead is also a limiting factor.
For affiliates, it is much more difficult to get accepted in CPA campaigns, and it is often impossible for beginners. Once accepted, they will have to work harder and smarter to get the kind of traffic that will convert. In addition, unlike PPC that can be worked into almost any website, the CPA offers will not work on the crowds that some types of sites attract. Furthermore, CPA offers are often seasonal and can end at any moment, leaving marketers with little to show for marketing efforts that did not have enough time to bear fruit.
Before promoting a product or service, affiliates need to look carefully and choose wisely. It should be something that offers quality to the consumer, and that is likely to be around long enough to be worth promoting.
Getting Started in CPA Affiliate Marketing
If you’re an affiliate looking to get started in CPA marketing, find more information at CPA networks and a guide on how to get started at CPA marketing methods. Make sure you’re ready and will be able to explain your marketing ideas to the networks when you apply. You will need to have an existing website so you can offer as evidence that you are serious about the opportunity (see how to join affiliate networks). Start with a limited number of networks and expand as your skills and experience grows.