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A big part of affiliate marketing is based on CPA marketing concept. CPA commonly stands for cost-per-action or cost-per-acquisition.
This means that advertisers deliver commissions to partners only when somebody has clicked on the ads from their partners’ websites and completed an action.
The common actions include purchases, getting a quote, requesting for a free trial, signing up for a newsletter, filling out a form, etc.
The way CPA marketing works is simple. Let’s say the advertiser’s primary goal for a particular partner is to deliver sales. The entire process would then be as follows: a visitor browses the partner’s website and clicks on the advertiser’s product. The visitor will then be taken to a landing page with all the relevant information about this product. When interested to buy, another click leads the visitor to the checkout process on the advertiser’s website. Upon completion, the advertiser will be informed and reward the respective partner for delivering this purchase.
Through CPA model, benefits can be enjoyed by both advertisers and partners.
Advertisers stand to benefit from CPA marketing, because this model encourages partners and affiliates to target visitors with a higher likelihood to become customers, thereby push the visitors further down the sales funnel or even completing sales. Furthermore, as advertisers can define the particularly specific actions, based on which their partners and affiliates are monitored and rewarded, any fraud relating to automatically generated clicks is minimised.
In general, partners stand to benefit from CPA model, as it pays out much better than other models. This is despite the fact that partners do not necessarily need to deliver a complete sale in order to gain commissions. This means that partners simply need to focus their campaigns to a more targeted audience, in order to gain more out of it.