How Does CPA Marketing Work? Learn the Benefits and Best Practices

Cost per Action (CPA) marketing is becoming an increasingly popular affiliate marketing strategy. Consider that, according to a Statista report, the U.S. CPA affiliate marketing expenditure went from $5.4 billion in 2017 to 8.2 billion in 2022. Companies can make money by promoting CPA offers (offers that measure users’ actions such as signups, downloads, subscriptions, or purchases) on social media platforms, forums, and blogs, which elevates businesses to new heights. Moreover, they can acquire new customers and get access to a wider audience cost-effectively. Let’s dig deeper into CPA marketing, how it works and its various benefits for businesses in this guide.

What is CPA Marketing?

CPA marketing is a type of affiliate marketing—an approach where a company hires a third-party publisher to promote the company’s products or services in exchange for commission or incentives.  CPA marketing focuses on getting a specific action completed by a potential customer. The process involves advertisers paying affiliates a commission only when a specific action is completed by a user, such as a sale, lead, or click.

Unlike traditional affiliate marketing, where commissions are based on a percentage of sales, the commission in CPA marketing is paid when a specific action is completed. That makes it a more targeted and cost-effective approach for advertisers.

How Does CPA Marketing Work?

The process of CPA marketing depends on selecting the right offers, choosing effective marketing strategies, and building trust with the audience. Here is a breakdown of the process:

1. Offer Creation

The advertiser creates an offer that specifies the action they want the user to take. For example, the advertiser may offer to pay $10 to an affiliate for every user who signs up for a free trial of their product.

2. Sign Up

Affiliates sign up for the offer and are given a unique affiliate link or a code that they can use to promote the offer.

3. Offer Promotion

Affiliates promote the offer using various marketing channels such as social media, email marketing, or paid advertising. When a user clicks on their affiliate link and completes the specified action, the affiliate earns a commission.

4. Conversation Tracker

The advertiser tracks the conversions and pays the affiliates for each successful conversion.

Benefits of CPA Marketing

There are several benefits of CPA marketing for advertisers and affiliates. The most significant ones are:

1. Low Risk for Advertisers

Advertisers only pay when a specific action is taken, such as a user making a purchase or signing up for a free trial with CPA marketing. This reduces the risk of payments without outcomes for advertisers compared to traditional advertising methods where they may have to pay for impressions or clicks without any guarantee of a conversion.

2. High Payouts for Affiliates

CPA marketing offers high payouts to affiliates for successful conversions. It means that affiliates can earn more money compared to other affiliate marketing models where the commission rate may be lower.

3. Variety of Offers

CPA marketing offers a variety of offers for affiliates to promote—from free trials to app downloads to lead generation. Moreover, this means that affiliates can choose offers that are relevant to their audience and that offer them the highest payouts, including commissions.

4. Flexible Promotion Methods

Affiliates can promote CPA offers using a variety of methods, including social media, email marketing, display advertising, and more. This flexibility allows affiliates to find the most effective promotion methods for their audience.

Categories of CPA Marketing

CPA marketing offers a wide assortment of offers for affiliates to promote, and they can be categorized based on the type of action that is required to earn a commission. Here are some of the common categories of CPA marketing:

1. Lead Generation

Affiliates are paid for generating leads for advertisers. It can include filling out a form, submitting contact information, or signing up for a newsletter.

2. Sale or Conversion

Here, affiliates get compensation for generating sales or conversions for advertisers. This includes selling a product to signing up for a subscription service, or completing a purchase

3. App Installation

App installation includes installing an app, registering for an account, or completing a level within the app.

4. Trial Offers

Affiliates are paid for generating free trial sign-ups for advertisers. It can include signing up for a free trial of a product or service, or downloading a free resource.

5. Clicks

Pay-per-Click (PPC) advertising or other types of advertising that generate clicks on an advertiser’s link can help affiliates to earn compensation. 

6. Form Submits

Compensations for affiliates are based on generating form submissions for advertisers, such as filling out a contact form, completing a survey, or submitting a request for information.

How to Become a CPA Marketer

To become a CPA marketer, you must have a combination of marketing, technical, and communication skills. 

Marketing Skills

As a CPA marketer, you will need to have a good understanding of marketing strategies, such as audience targeting, ad copywriting, and conversion optimization.

Technical Skills

You will also need to have some technical skills, such as the ability to create landing pages, set up tracking pixels, and analyze data.

Know-How to Establish Online Presence

Knowing how to establish an online presence of a company through a blog, website, or social media account can be helpful in getting approved for CPA offers and driving traffic to your promotions.

Communication Skills

You will need to be able to communicate effectively with advertisers and other affiliates, as well as your audience.

Compliance Knowledge

You will also need to be familiar with the legal and regulatory requirements for advertising and marketing, such as the Federal Trade Commission’s guidelines on disclosure and the CAN-SPAM Act.

Moreover, once you acquire all the above-mentioned skills, follow the below steps to become a CPA marketer. 

Step 1. Choose a Niche and Join a CPA Network

The first step is to select a niche or industry that you are passionate about. Once you have identified your niche, you can join a reputable CPA network that offers relevant CPA offers in your chosen niche.

Step 2. Apply to CPA Offers

Browse through the available CPA offers after joining the network and apply to the ones that are most relevant to your niche and audience. Make sure to read the terms and conditions of each offer carefully and follow them strictly to avoid any issues.

Step 3. Get Approved and Promote CPA Offers

You will need to get the CPA offer approved by the advertiser before you can start promoting it. Advertisers look for affiliates with a strong online presence and a track record of driving high-quality traffic. Once you are approved, you can begin promoting the offer using various marketing channels, such as social media, email marketing, or paid advertising.

Step 4. Track Results and Optimize

Track your results and optimize your campaigns for better performance. This can involve split testing different ad creatives, targeting options, and landing pages to improve your conversion rates. Keep monitoring your campaign regularly and make adjustments as necessary to ensure maximum profitability.

ALSO READ: What is Digital Marketing?

Best Practices of CPA Marketing

Choose High-Quality Offers

Focus on promoting offers that are relevant to your audience and that have high conversion rates. Look for those that have a good reputation and come with competitive payouts.

Test and Optimize Campaigns

CPA marketing is all about testing and optimizing campaigns for better performance. This can involve split testing different ad creatives, landing pages, and targeting options to improve your conversion rates and ROI.

Use Multiple Traffic Sources

Diversify your traffic sources to reduce risk and increase reach. This can include using paid advertising, social media marketing, email marketing, and SEO.

Focus on Building Trust

Building trust with your audience is key to succeeding as a CPA marketer. Be transparent about your promotions and disclose any incentives or affiliations. Provide value to your audience through helpful content and recommendations.

Monitor Compliance

Ensure that your promotions comply with all legal and regulatory requirements, such as the Federal Trade Commission’s guidelines on disclosure and the CAN-SPAM Act. 

Stay Up-To-Date with Industry Changes

CPA marketing is a constantly evolving industry, and it is important to stay up-to-date with changes in technology, regulations, and best practices.

Is CPA Marketing Worth it?

CPA marketing can be a lucrative way to earn money if you are able to drive high-quality traffic to your promotions and convert it into leads or sales. Also, it offers a low-risk way to test different marketing strategies, as you only pay for the actions that are taken by your audience. However, CPA marketing can be challenging given the competition in this space. You will need to be able to optimize your campaigns for maximum ROI.

Whether CPA marketing is worth it will depend on your individual goals, skills, and experience. Moreover, if you are willing to invest the time and effort required, and you are able to find profitable offers in your niche, then CPA marketing can be a viable way to earn money online.

Frequently Asked Questions

CPA Marketing Vs Affiliate Marketing

Though CPA marketing falls under the umbrella of affiliate marketing, there is a distinction. CPA marketing focuses on driving specific actions, while affiliate marketing focuses on driving sales or leads.

What is the CPA Marketing Formula?

The CPA marketing formula drives targeted traffic to an offer and completes the desired action at a cost that is less than the payout for that action.

What is the Best CPA Marketing Website?

Popular CPA marketing networks and websites include PeerFly and CPAlead. 

Learn More About CPA Marketing with Emeritus

According to a Zippia report, the affiliate marketing industry is expected to witness a 10% growth rate in 2023. It implies the rising demand for affiliate managers in this field, as well as for this type of marketing strategy. You can enroll in Emeritus’ online marketing courses to learn more about CPA marketing and other innovative marketing approaches. 

Write to us at content@emeritus.org