5 Common Misconceptions About CPA Marketing
Many people have wrong ideas about CPA marketing (cost per action), usually mistaking it for another type of online marketing tactic and online advertising method.
To know more about this type of marketing tactic, everyone should also be aware of the misconceptions surrounding it.
1. CPA is a marketing tactic.
This is true in a general sense of CPA marketing on mobile platforms. This is also how many marketing experts address it. However, more than a general marketing tactic, it is really a form of online advertising model where members of a CPA network use their websites to promote the ads. It just so happen that these ads require a particular action that when done means successful marketing tactic on the part of the CPA network.
In the simplest sense, PPC only requires click and impression while CPA requires quantifiable information.
2. The CPA network decides for the required action.
CPA networks are just vendors of ads from other parties. These parties are the advertisers that are looking for ways to promote their business by using other websites. Instead of contacting websites one by one for ad placement, they go to CPA networks that serve as their outsourcing partners. The rates for the actions also vary depending on the contract between the network and the advertiser.
3. CPA marketing is exclusive to online platforms.
The internet is the easiest avenue to perform CPA because of tracking capabilities. However, CPA has long been part of traditional marketing through TV, radio, and print advertising. This is usually called “per inquiry” in TV and radio terms. In print media, this is not a common practice but it does exist. This is measured by asking customers of their sources.
4. Cost per action is the same with cost per acquisition.
CPA is also called cost per acquisition sometimes since CPA networks usually require action to “acquire” something, like credit card number or contact information as lead. Nonetheless, in terms of payment scheme, they are completely different from the point of view of the network and the marketer.
Cost of acquisition is computed by dividing the number of successful acquisition to the cost of the entire campaign. If the entire campaign cost the advertiser $1,000 and there are 20 successful acquisitions, the cost per acquisition is $50. Nonetheless, this cost is not the same with the payment given to the marketer since the network directly pays him and not the advertiser. Thus, the cost per action received by the marketer is not the same as the cost per acquisition.
5. CPA marketing lets a marketer earn for every successful action.
Generally speaking, this is really the case. The term of agreement is as simple as action equals cost, and the cost goes to the marketer. However, there is also a type of this marketing tactic that requires “delivery” to be fulfilled by the network. This is called Pay per lead (PPL).
Normally, every action automatically receives a corresponding price. However, this is only the network guaranteeing the marketer his profit and not the advertiser guaranteeing it. Under PPL, an advertiser will only pay as soon as the leads are sent electronically. If the CPA network doesn’t perform under the terms of the agreement, the marketer will end up getting nothing in return.