When you’re trying to augment your online advertising strategy, cost-per-action advertising, or CPA, probably isn’t all that high on your priorities. In fact, a lot of marketers don’t bother with it at all. This is a shame since cost-per-action advertising is a great way to grow your business. You just have to know what it takes. Learn how to make CPA Marketing work for your business.
Most online ad platforms (Google, Facebook, etc.) use a pay-per-click (PPC) model to charge their advertisers. Your business has probably dealt with this already, but it’s not the only method available. Cost-per-action models work a bit differently, yet they can be every bit as rewarding. While PPC models require you to pay every time someone clicks on your ad, CPA only requires you to pay when someone converts or performs the desired action. If people are clicking on your ad without any further action, you’re paying for a whole lot of nothing.
The cost-per-action model extends far beyond conversion, however; otherwise, we would call it cost per conversion. The “action” part of cost-per-action, defined as anything you would want a customer to do, is important to consider. Actions can include making a purchase, signing up for a newsletter, watching a video, and plenty more.
These actions aren’t all equal, however, as you have to consider intent when it comes to how much you’re paying. For example, there are low-intent actions such as reading free content or looking through an online guide you’ve created. These actions can be less expensive with CPA advertising, compared to the PPC model. Higher-intent actions include things like signing up for a webinar, downloading a demo or making a purchase. Actions like this will cost you a bit more in comparison.
Cost-Per-Action Advertising: Benefits and Drawbacks
The primary benefit of cost-per-action advertising is that you only have to pay for successful ads. Clicks don’t always add actual value to your business, but customers taking actions do, provided you specify the actions beneficial to your business. Additionally, a CPA model allows you to identify problems with your campaign without having to pay for it.
Imagine a post you made draws a lot of response from a demographic you weren’t trying to target. They clicked on your content, but they didn’t go any further since your services weren’t meant for them. With a PPC model, you’d have to pay for all those wasted clicks, but CPA allows you to re-target your content without paying for your mistake.
While a CPA campaign can be more affordable than a PPC campaign when things go wrong, it may be tough to be profitable with it if things go right. If the actions you want your customers to take aren’t ending up with more sales, you’re going to be losing money in the long run. Always consider the overall cost of actually making the sale before you declare a cost-per-action campaign a success. More leads don’t matter if you’re losing money on every action.
CPA Marketing Means Paying for Conversions
The conventional method of CPA is to negotiate a specific price for the cost-per-action with the ad publisher. Being a reputable marketer will put you in a much better position for doing this, so cost-per-action advertising typically isn’t something you do when you’re first getting started. Appealing to smaller publishers and networks may work better in those cases since, while they have less reach, they tend to be more flexible about who they’ll work with.
With Google Ads, you can implement Target CPA strategies which use sophisticated algorithms to calculate which clicks are most likely to lead to conversions. Additionally, you only have to pay for conversions rather than all clicks. For example, if you set your target CPA to $10 and you get eight conversions one month, you only have to pay $80, regardless of the total number of clicks your ad received. You just have to make sure you don’t apply target CPA to offline conversion types. Additionally, your Google Ads account needs to have at least 100 conversions in the last 30 days, with each conversion happening no more than a week after clicking the ad, in order to be eligible.
Determining how to make CPA marketing campaigns work for your business can be a huge challenge, so it might be best to simply hire someone to take care of it for you. For expertise and data-driven results you can count on, Symphonic Digital has all the experience you need. Contact us today to take the first steps towards your successful CPA strategy.