cost-per-action (CPA)
Definition
Online advertising payment model in which payment is based solely on qualifying actions such as sales or registrations.
Information
The actions defined in a cost-per-action agreement relate directly
to some type of conversion, with sales and registrations among the most common.
This does not include deals based solely on solely clicks, which are referred to specifically
as cost-per-click or CPC.
The cost-per-action (CPA) model is at the other end of the spectrum from the cost-per-impressions model (CPM), with
the cost-per-click (CPC) model somewhere in the middle. In a CPA model, the publisher is
taking most of the advertising risk, as their commissions are dependant on good conversion rates from the
advertiser's creative units and Web site.
Marketers looking for cost-per-action deals have several options. Publishers
with considerable excess inventory may be willing to consider nonstandard offers.
Sites specializing in incentive programs are in a position to offer CPA pricing
on various types of leads, although the usual caveats concerning incentivized
traffic still apply. Perhaps the most widespread use of performance-based pricing is affiliate
marketing, whereby merchants/advertisers determine what actions they want to reward and how
much they are willing to pay.
Synonyms
CPA
Related Terms
conversion rate, cost-per-click (CPC), CPM, customer acquisition cost
Sites
n/a
Articles
Benchmark Your CPA
ClickZ (February 2, 2002)
CPA Is Not the Holy Grail of Marketing
ClickZ (January 12, 2001)
It's CPA Time... or Is It?
ClickZ (January 1, 2001)
CPA - Winners and Losers
ClickZ (October 6, 2000)
Cost Per Action Ad Pricing
ClickZ (August 23, 1999)
Cost Per Action Pricing - Risks And Benefits
ClickZ (August 16, 1999)
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