This is the first part of my new article series on Cost-Per-Action (CPA) marketing. In this series, we’ll cover the basic ideas involved in CPA marketing and how you can use them in your business.

Part 1 will be a general overview, and we’ll continue in Part 2 with how you can increase your lead generation and sales activities with CPA. And finally, in Part 3, we’ll cover ways that you can use CPA marketing to supplement and grow you business.

What is Cost-Per-Action (CPA) Marketing?

The key to cost-per-action marketing is the third word – “action”. It is what differentiates it from cost-per-sale (CPS), cost-per-lead (CPL), and cost-per-click (CPC) methods. With CPA marketing in your business, you are asking the viewer to “take action.” They will fill something in on a form and submit it, or take some particular action desired by the advertiser.

This is different from CPL marketing in one small way. CPL marketing is specifically designed to collect a “lead” whereas CPA only requires action, like submitting a zip code or picking your state. Both methods are used for lead generation, but CPL is purer in focus. It requires contact information that can be used to specifically reach a prospect directly.

Cost-per-sale (CPS) is more traditional affiliate marketing. You get paid if you send a prospect to an advertiser and they actually buy something. Money on the table. Since CPA marketing does not require money, and often doesn’t even require much personal information, it is much easier to obtain a conversion.

The Benefits of CPA Marketing

CPA marketing has a number of benefits over traditional channel marketing as well as normal affiliate marketing.

With CPA marketing, advertisers are harnessing the power of an affiliate force to multiply their efforts. Lots of people doing a little bit of promotion leads to a wider range and higher amount of prospects. This can increase the diversity of the leads, which is good for some offers, and depending on the affiliate, can also increase the quality of leads. Essentially, the CPA process puts a screening methodology at the beginning of the marketing funnel, so that CPA action-takers are pre-qualifying themselves for an offer to some degree. The degree depends on how much information is collected at this stage.

Because the conversion process requires less serious action on the part of the prospect, CPA marketing conversion rates are often higher than traditional CPS marketing. With CPS, somebody (either the advertiser in direct marketing, or the affiliate as a CPS marketer, or both) is paying for making sales. The advertiser is supporting a direct sales process offline or online. The affiliate is supporting a pre-sell process that requires a purchase, which generally has a lower conversion rate and requires higher payouts to maintain a profit.

CPA marketing offers new opportunities as a marketing channel. In Part 2 of this Cost-per-Action marketing series, we’ll discuss how you as an advertiser of a product or service can use CPA marketing to increase the quality of your leads, boost conversions, and increase gross and net profit.

Do you have any experience as an advertiser or affiliate marketer with CPA? We’d like to hear about it here.

Categories: CPA, Entrepreneur, General, Home Business, Online Marketing, Revenue Streams, Small Business
Tags: business, CPA, marketing