A business could have the most innovative, effective product or the best service, but all that is meaningless if no one knows the product exists. Companies can’t survive without customers, which is why marketing is essential for every business owner.
Affiliate marketing is a unique way to advertise. It lets brands partner with content creators, influencers, and publishers to reach customers more organically than traditional advertising. Those creators, in turn, get to monetize their content.
One of the most effective affiliate digital marketing methods is CPA marketing.
What is the CPA Marketing Model?
Cost-per-action (CPA) marketing is a type of affiliate marketing where brands pay publishers for convincing their audience to take specific actions.
For example, a brand might pay a blogger to write a review of their new product. At the end of a post, the blogger will encourage their readers to visit the brand’s website and make a purchase. The brand then pays a commission to the blogger for every purchase they refer.
CPA typically revolves around sales, in which brands pay content creators for every sale they refer. However, it can also refer to promoting other actions, like signing up for a mailing list or installing a mobile app.
In many cases, brands and publishers use an affiliate network to partner with one another. These networks serve as intermediaries and manage things like tracking conversions and payments. Brands can post their CPA offers on the network, and affiliates can search for relevant offers from an extensive list.
Benefits of CPA Marketing
As a brand, there are many benefits to using CPA marketing.
Traditional ads, like those on TV or website banners, can feel forced or inorganic, and many people tend to ignore them.
Affiliate marketing means working with creators and publishers that people already know and trust. A creator can seem more genuine to the audience when promoting a product and, therefore, more impactful.
With traditional advertising, you have to pay for a banner on a website or a certain number of views on your advertisement video. If your ad flops and doesn’t lead to sales, you still have to pay for the advertising space.
With CPA marketing, brands only pay content creators and publishers for the sales they help make. You won’t lose money on a bad ad campaign because you won’t have to pay out unless the campaign makes sales.
Strong Return on Investment
On a related note, brands can bet on a high return on investment for advertising dollars.
If you know that you profit $50 per sale and offer a $5 commission per sale, you’re making a huge profit for every dollar you spend on the CPA campaign.
Easy to Set Up
At its most basic, all a brand needs to try CPA marketing is a product to sell and a way to find content creators. Affiliates will create all the content to advertise your product for you, and an affiliate network can handle things like tracking and payment if you choose to work with one.
Brands can choose to invest more money into campaigns to offer resources and tools that affiliates can use to increase conversion and attract high-quality traffic, but there’s minimal upfront cost required to get started.
As an affiliate, all you really need to begin marketing is a simple website and a way to drive traffic.
Types of Commission Structures in Affiliate Marketing
There are several affiliate marketing models, and choosing the proper commission structure for your brand is essential to getting publishers to promote your offers.
Some of the possible structures include:
Cost-per-click (CPC). With this model, you pay a flat fee for each user who clicks on an affiliate link in the publisher’s content. This is one of the oldest types of affiliate marketing out there.
Cost-per-mille (CPM). This model pays your marketing partners for every one thousand impressions on an advertisement or branded content. In many ways, it loses the benefits of other affiliate marketing strategies because you pay for views rather than conversion.
Cost-per-action (CPA). This is sometimes referred to as cost-per-acquisition. You pay the publisher for each person they convince to complete an action, like buying something, signing up for a mailing list, or anything else.
Cost-per-sale (CPS). A type of CPA marketing that pays your affiliate a fee for each sale they generate.
Cost-per-lead (CPL). This model is popular in industries with highly expensive products and the business-to-business sector. Affiliates earn payouts for each lead they help generate for a brand.
Revenue sharing. This model gives the affiliate a percentage of the revenue they help produce, and it’s popular for subscription sites. Affiliates earn money on the initial subscription and each renewal.
Cost-per-install (CPI). This is another CPA marketing model where brands pay affiliates for each person they convince to install an app.
Affiliate Marketing Terminology
Like any specialized field, affiliate marketing uses unique language and jargon. To navigate affiliate networks and find partners effectively, you’ll need to understand some essential terms.
Affiliate agreement. This basic contract outlines the relationship between the advertiser and the publisher, and it includes each party’s responsibilities and details the commissions the publisher will earn.
Commission. The amount a publisher earns for generating a sale.
Chargeback. The amount deducted from a publisher’s commissions for sales that fall through or get refunded.
Cookies. Internet files that help advertisers track which sales an affiliate generates.
Conversion rate. The percentage of traffic that eventually completes a desired action.
Contextual link. A link on an affiliate website directing readers to the advertiser’s site to make a purchase.
Landing page. The page that contextual links direct to where customers are encouraged to make a purchase or complete another action.
Tips for Success in CPA Affiliate Marketing
If you want to succeed in CPA affiliate marketing, follow these tips.
Choose the Right Network
For brands, finding affiliates on their own can be incredibly difficult. Content creators also need help finding brands that are relevant to their audience. For both groups, affiliate networks can tackle all of that hard work, freeing up time and money otherwise spent searching for partnerships.
Some affiliate platforms specialize in specific types of products, called verticals, while others are more generalized. Find a network with verticals that match your target audience to give yourself the best chance of finding a partner.
Also, practice due diligence to make sure the platform isn’t shady. While most CPA affiliate programs are legitimate, you don’t want to associate with networks that use fraudulent tracking or don’t pay out.
Get to Know Your Affiliate Manager
Most CPA programs will assign an affiliate manager to each person who signs up for the platform. As you work with your manager, you’ll get to know them, and they’ll learn more about your business.
You can rely on that partnership and ask your manager for help finding good offers, optimizing your content, and improving conversion.
Traffic Boosting Strategies
Brands can help their affiliates create more sales by providing resources to use in their content, like stock images of the products or video content.
Creators can use other strategies to try to boost conversion, such as improving their website’s SEO or placing affiliate links on social media.
Top CPA Affiliate Networks
If you’re interested in CPA marketing, consider these affiliate networks.
Admitad describes itself as “a suite of solutions for advertisers, publishers, and influencers of all sizes.” The company offers various partnership models, including cashback services, coupon deals, and email marketing.
Affiliates on the platform can browse CPA offers from more than 2,000 online retailers. Each deal includes information about historical conversion rates and how much you can earn for each sale.
One of the best CPA networks, CJ Affiliate works with household name brands like Disney, Overstock, and Barnes & Noble, making it appealing for content creators who want to advertise products their audience is likely to be familiar with.
The network also gives affiliates access to a powerful reporting dashboard. You can use the dashboard to examine how your content is driving conversions and use that information to improve future content.
MaxBounty is another affiliate network with more than 3,000 active campaigns for affiliates to choose from. It offers multiple commission structures under the CPA umbrella, including CPS, CPL, and CPI.
Affiliates can earn a solid commission on most sales, but MaxBounty also offers performance bonuses, giving even more rewards to its top affiliates.
This marketing network has campaigns available across the globe, making it a good platform regardless of where you want to drive sales.
Does CPA marketing really make money?
Yes, CPA marketing does make money. According to Influencer Marketing Hub, commission rates can range from 1% to 60% of a sale, although that depends on the affiliate campaign and product being sold. It’s not unusual to see brands offering commissions of $100 or more for a single sale.
What is a good CPA for affiliate marketing?
A good CPA for affiliate marketing depends on the conversion rate, product price, and industry niche. Some brands offer larger commissions, even into the hundreds of dollars, but their products are likely harder to sell. Other products may have huge conversion rates but lower payments per action.
Is CPA affiliate marketing legit?
Yes, CPA affiliate marketing is a legitimate way for businesses to advertise and content creators to monetize their content.