CPA marketing can be a great way to increase ROI and promote your brand with relatively low risk. Find out how to expand your audience reach with this affiliate marketing tactic. Cost per acquisition (CPA) treads in that direction. It is a scalable and feasible way to make money but in a strategical manner, giving the returns a much better proportion compared to digital advertising.
Table of Contents
What is CPA marketing?
CPA marketing is a type of affiliate marketing that aims to offer a commission to an affiliate partner after a particular action has been completed. This is a substantial new way of marketing digitally because it allows you to only spend money after a potential customer has completed an action of your choosing.
Your business can identify what this specific action is — purchasing a product or service, filling out a form, watching a video, asking for a quote, etc. The affiliate is then only paid post-purchase or after this action has been completed, making your marketing spend much more valuable.
Most e-commerce businesses that employ CPA advertising techniques partner with celebrities, influencers, or top names in their industry as affiliates. This method allows affiliates with large followings to promote a company’s products or services to their followers or fans in order to earn money for themselves, as well as the business they’re working with.
The CPA Marketing Model
The CPA marketing model is an advertising model that consists of a publisher (affiliate), a business (advertiser) and a CPA network (a platform that brings together affiliates who want to earn commissions by promoting products and businesses that want their products promoted).
Advertisers typically use a CPA network to find the best affiliate to advertise their product — typically a publisher or influencer who creates related content and has an established audience.
For example, a travel blogger might specialize in publishing content about culinary hotspots via WordPress. An app developer might offer a mobile app that lets users find and review restaurants, which would appeal to the travel blogger’s audience.
The CPA network helps match affiliates and advertisers so that influencers can endorse products they genuinely like while earning a commission for each sale. Meanwhile, businesses can reach a customer base they wouldn’t otherwise have access to.
CPA affiliate marketing makes use of web browser cookies to attribute customer actions to a specific affiliate link or referral source so that publishers can earn a commission for any sales they helped generate.
Affiliate or publisher.
An affiliate is usually an influencer, publisher or content creator who runs a blog, website or brand with a built-in audience. Affiliates partner with advertisers to drive traffic to the advertiser’s ecommerce site.
Business or advertiser.
The business or advertiser is a brand that seeks to drive quality traffic to their ecommerce site and increase sales by partnering with an affiliate who can promote their products.
A CPA network is a conduit between an advertiser and publisher — typically a company whose main purpose is to vet qualified publishers and help advertisers find offers from publishers that are most likely to generate leads.
CPA networks also manage relationships between advertisers and publishers and are often responsible for handling payments.
How does CPA marketing work?
Let’s look at an example of CPA marketing in action to better understand how this marketing strategy works.
For instance, if you own an apparel company and partner with an influencer with a large social media following, that influencer would be your affiliate. They’re paid to promote a product, service, or your overall brand, but only receive payment if their followers complete your specified action.
In this case, you might decide to pay your affiliate $10 for every $100 worth of apparel fulfilled through your e-commerce store when customers use their affiliate link. In this case, your return on ad spend would be 10:1, which is quite impressive.
Benefits of CPA marketing
If you’re interested in using CPA marketing to promote your online store or brand, here are some benefits you should be aware of.
1. It can expand your audience
One incredible benefit of employing CPA marketing is how quickly it can broaden your audience. By partnering with influencers, you’re able to get your products in front of more eyes, potentially expanding your customer base. This method is particularly effective if you’re trying to break into a new audience or demographic.
2. It enhances your brand reputation
On top of adding new customers, partnering with affiliates can also boost your brand reputation and recognition. This can solidify your brand as one of the top competitors in your industry, which can positively affect your sales and digital presence. It will also improve consumers’ trust in your overall brand and suite of services or products.
3. It’s extremely affordable
Perhaps most importantly, CPA marketing’s main benefit is how affordable it is, making this method an easy way for companies of any size to engage with new prospects. Instead of spending money on digital ad campaigns aimed at drawing impressions, clicks, and engagements that won’t turn into leads or conversions, you can instead improve your marketing ROI with CPA marketing.
4. Lastly, it’s low risk
Since CPA marketing is a performance-based marketing technique, it’s very low risk for companies and affiliates. Both you and the affiliates you partner with only make money if the desired outcome is reached. This motivates affiliates to market on your behalf (to earn their commission), while you only pay out marketing dollars when your desired goal has been achieved.
Best CPA marketing tips to improve conversion rates
Although CPA marketing has lower risks and potentially higher rewards than other digital marketing techniques, it’s not a foolproof method. Here are some tips to consider to help your affiliate marketing strategies perform as well as possible.
1. Fine-tune your messaging
An affiliate might be doing a great job at promoting and marketing your product, but if a user lands on your page and isn’t further compelled to complete a purchase, that loss is on you. High quality messaging is the key to converting users. You’ll want to be sure you’re fully conveying the value of a particular product by first addressing the pains users will be (or are) experiencing without it.
Make sure your messaging matches the language your affiliate will be using, so users are never confused once they start the buying process.
2. Establish multiple goals
Yes, your ultimate goal may be for a user to purchase a product or sign up for your newsletter or email updates. But setting up multiple goals can help you track user behavior on your site in order to improve your landing pages, further expand your reach, and increase your sales.
To do this, you’ll want to track multiple smaller goals, such as the time a user spends on a page, the number of pages viewed, etc. You can use this data to make your landing page more engaging to boost potential conversions.
3. Always employ A/B testing
It’s impossible to know upfront if a landing page is providing the right experience for a user. That’s why A/B testing is so crucial. It allows you to test out several different landing page models, perhaps with major or minor differences. You’ll be able to learn a lot from your users’ behavior, so you can optimize the best landing page possible.
Once you have a landing page that’s performing well, don’t stop testing. There are always new techniques to improve upon your successes.
4. Review your budget frequently
Once you have hard data from your first CPA marketing campaign, you’ll be able to start to understand how to set your CPA budgets. It’s a good idea to review any existing PPC or other Google Ad campaigns to set an initial budget. You might find you can increase your budget, which could lead to exposure to influencers and affiliate marketers with even larger followings and reach, which can boost your ROI significantly.
5. Don’t shut down other digital marketing strategies
CPA marketing is a great way to grow your business and increase sales, but you’ll often see the best results when you combine this strategy with your existing digital marketing campaigns. Continue to review your digital ads for winning strategies and use any wins you experience with one campaign to improve the other.
CPA Network Terminology
To get started with affiliate marketing, you need to be familiar with basic terminology and key metrics so you can measure the success of your campaigns:
Affiliate Agreement: A contract stating the terms of the affiliate relationship between the advertiser and publisher. The agreement specifies each party’s responsibilities and the commission a publisher receives in the event of a sale (typically a fixed percentage of the sale price).
Above the fold: Content on a website that is visible without needing to scroll down. Because of its high visibility, “above the fold” is considered the most desirable (and expensive) spot for placing advertisements.
Chargeback: When a commission is deducted because a sale fell through (i.e. the item was returned or the customer requested a refund).
Commission: A percentage of the sale price of a product that is paid to the affiliate for an attributed conversion.
Cookies: Cookies allow advertisers to track which affiliate deserves credit for a sale. Cookies assign each website visitor a unique identifier and track actions they take on the website, such as clicking an affiliate link.
Contextual link: A text link placed within an affiliate website that leads back to the advertiser’s website.
Conversion rate: The percentage rate of website visitors that turn into customers divided by the total traffic.
Cost Per Action (CPA): The cost of advertising divided by the number of actions taken. For example, if a business spends $150 on a campaign and there are 10 actions associated with that campaign, the cost per action is $15.
Cost Per Lead (CPL): The amount of money it takes to generate a new prospective customer for your sales team. Say you spend $1000 on a PPC campaign and 10 users convert into leads, then your CPL is $100.
Earnings Per Click (EPC): The average amount of money you earn each time someone clicks one of your affiliate links. Calculated as total earnings over period “x” divided by the number of clicks over period “x.”
Offer page: The webpage where the conversion occurs after a customer takes the required action.
Return on Investment (ROI): The profit generated from an affiliate campaign divided by the ad spend, multiplied by 100.
CPA Marketing Best Practices
To make the most of your CPA marketing campaign, find an affiliate manager with whom you have a good relationship. Also, choosing the right offer and CPA network are key to achieving high returns.
Form bonds with affiliate managers.
An affiliate manager oversees an affiliate program on your behalf. They find affiliate partners that suit your requirements and negotiate affiliate agreements with publishers.
Find an affiliate manager who will help you build a positive relationship with your affiliate partners so they will continue to promote your products. Some affiliate managers also provide creative input to help affiliate partners create the most relevant content.
Avoid shady networks.
Affiliate fraud occurs when affiliates artificially inflate engagement metrics (eg: clicks or traffic) to earn higher commissions. Pop-ups, spam or using bots to flood a website with traffic are examples of unscrupulous activities undertaken by untrustworthy affiliates.
Some affiliates simply publish low-quality content that does your brand reputation more harm than good. Choose a high-quality CPA network that has a strict vetting process for publishers and offers fraud prevention services.
Join a CPA network.
As a beginner or newbie to online marketing, joining a CPA network enables you to choose a CPA offer and start receiving referral traffic from affiliate sites. Choose a network that offers a robust dashboard to track important metrics and financial information.
Another important thing to look for is a solid list of offers from a range of reputable publishers in the verticals you’d like to target.
A good CPA network updates its offers regularly, so you should have a long list of offers to choose from at any given time. Some networks also provide creatives such as landing pages, banners and recommended ad copy, which makes it easy to start a campaign.
Also, check the network’s vetting process for publishers. If the platform is too lax, they may be accepting subpar publishers.
Implement traffic strategies.
Now that you’ve found an offer and joined a network, you must drive traffic to your site. The most common methods include SEO, email marketing, pay-per-click (PPC) ads, native ads, Google ads and social media.
Adding CPA marketing to your digital ad strategy is a great way to bring in easier, more affordable, and lucrative wins. CPA marketing allows you to only pay for your marketing efforts once a sale or agreed upon action has been taken, offering you a low-risk way to increase your ROI, audience, and overall brand awareness.
Thus, to conclude we can say that it is an efficient way for a business to expand, it can help the business by getting more customers and also by creating brand awareness. But more important is maintaining those customers by providing them with products with the best qualities and also fulfilling their demands.
Ready to Drive Targeted Traffic to Your Website?
Now that you have these tactics in your toolbox, you should be able to put together a simple strategy for getting more people to your site. Remember, though, that this isn’t a one-off exercise, nor do you have to try everything at once or use only one tactic at a time.
Try something. See if it works. If it fails, stick at it a little longer but bring something else into your roster. Most importantly, make sure the technical aspects of your site are running smoothly — if you need targeted audience, for example, we’ve got plans to suit any budget!