Council Post: Cost-Per-Action Marketing Helps Maximize Growth, Minimize Risk

CMO at Adsterra, with 10+ years of experience in marketing global brands. Gala is a judge in the International Performance Marketing Awards.

Conventional wisdom says that to grow a business, you need to put your money where your mouth is. By paying upfront for traditional marketing, you’re investing in the belief that customers will embrace your business once they learn what it has to offer. But when those marketing campaigns fall flat, as they sometimes do, the lost investment can be difficult to recover from. 

That’s why businesses are increasingly responding to that risk by adding cost-per-action marketing, or CPA marketing, to their marketing mix. With CPA marketing, businesses simply get what they pay for, typically with minimal upfront investment of time, energy and capital. 

Choose Your Own ROI

CPA marketing is a form of affiliate marketing, which countless web-based businesses have used to break into crowded markets and grow their brands. Just as with affiliate marketing, in which businesses count on bloggers, YouTubers, celebrities and other influencers to promote their brands, businesses running CPA campaigns only pay their affiliates after customers spring into action. But unlike most affiliate marketing, the “action” in CPA marketing is not necessarily a purchase; in fact, it can be just about anything.

CPA campaigns can be designed to prompt potential customers to sign up for newsletters, download free software, watch online videos or request price quotes, just to name a few common actions. Affiliates then push that call to action out to their audiences, and when members of those audiences perform the specified actions, the advertiser pays the affiliates a commission.

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This allows businesses to decide exactly how much they want to pay for every action, while simultaneously protecting them from spending marketing dollars on prospective customers who decide they’re not interested. 

If the goal is to generate leads, for example, the advertiser can choose what they want to pay for each prospect who registers on their website. It’s the same with ad impressions; they can set a price for each prospect who watches their latest commercial all the way to the end. And when CPA marketing is used for sales, it allows the advertiser to control their return on ad spend from start to finish. If they’re looking for a strong return of 10:1, they can offer their affiliates $5 for every $50 worth of products their followers purchase using their affiliate link.  

CPA Networks Make It Possible

With the right connections, some companies can build their own small CPA networks in-house. But for everyone else – or for any business that wants to scale up its CPA campaigns as it grows – it helps tremendously to work within an established third-party CPA network.

A powerful CPA network provides a platform in which advertisers and affiliates can connect and forge mutually beneficial relationships. It’s an efficient way for advertisers to find affiliates who have already cultivated the exact audiences they’re trying to reach, and it works both ways – ambitious affiliates also flock to CPA networks because they want access to CPA commissions that they know they can earn.

The right CPA network can act as a gatekeeper, screening would-be affiliates to make sure they have the reach and skill sets required to make them successful brand ambassadors. And the most sophisticated CPA networks also strive to make CPA campaigns easier to run and evaluate by providing a user-friendly interface for managing affiliates and tracking the data they generate.

CPA Marketing Wisdom

The low-risk, low-cost nature of CPA marketing makes many up-and-coming companies want to jump in with both feet. And while it’s easy to get started, there are a few best practices that the most successful advertisers observe when using CPA marketing to grow.

1. Don’t fixate on a single “action.” You may place a CPA offer with just one goal in mind, such as generating new leads or simply driving sales. But the versatility of CPA marketing means that you can pursue multiple goals within a single campaign. It’s important to think big about all the individual actions you want prospective customers to take, and to leverage your affiliates to accomplish as much as possible while you have the audience’s attention. 

2. Experiment with different strategies within each CPA offer. Every affiliate will bring their own personality and sense of salesmanship to a campaign, but the most important decisions fall to the advertiser. Share a variety of pitches, taglines, landing page designs and other elements with your affiliates via your CPA network to see what works and what doesn’t. Ongoing experimentation can not only improve the efficiency of your CPA marketing, it may also reveal strategies that work better in traditional marketing, too.

3. Collect and analyze as much data as possible. CPA campaigns should be monitored closely and reevaluated constantly. While this means checking in on affiliates to see how they’re promoting their advertising partners, the most valuable information is in the data. What percentage of visitors click through to the advertiser’s site? How deep do they go into the site’s navigation? How much time do they spend on each page? These data points can help you decide if the traffic you’re receiving from your affiliates is of high or low quality.

4. Support affiliates with the tools they need to succeed. This can include sending free products for influencers to review, creating customized graphics for bloggers to include in their posts or providing prewritten copy for affiliates to use when engaging directly with prospects via email or social media. Using your CPA network to regularly communicate with affiliates about these needs and fulfilling them promptly is key to their success, and therefore your success. You may even find that your CPA network provides templates for many of these marketing tools, saving you time and effort.

5. Reward and retain the most effective affiliates. Some affiliates will always rise to the top, and keeping them around is usually worth a little extra investment. A pat on the back is nice, but if you really want to keep your best performers motivated and loyal, an occasional cash bonus is even nicer. Arranging these bonuses via your CPA network will also make your offer more appealing to new affiliates, helping you grow even faster.

There’s risk involved in any business. But with a solid CPA marketing plan, companies don’t need to gamble their entire marketing budgets on traditional advertising. They can simply use CPA networks to buy the customer actions they want, one action at a time.


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