CPA Advertising

Cost-Per-Acquisition Advertising (CPA advertising) - also known as Cost-Per-Action advertising - is an online advertising process in which an advertiser only pays per conversion, whether it be a lead or a sale.

CPA advertising differs greatly from traditional forms of online advertising such as the Cost-Per-Impression (CPM) or Cost-Per-Click (CPC) models. It is strictly performance based advertising; instead of the advertiser having to pay the publisher for every ad impression or for every click-through to a website and hoping for a conversion to a lead or a sale, the advertiser gets the traffic for free and only pays for the results.

Affiliate networks such as CX Digital Media specialize in CPA advertising, and take the majority of the risk in the process. The network receives an agreed upon fee from the advertiser for every lead (Cost-Per-Lead) or for every sale (Cost-Per-Sale), and in turn pays out the majority of the fee to their affiliates in exchange for their traffic. It is that traffic that generates the conversions for the advertiser. Due to the nature of the CPA model, CX Digital Media's revenues are dependent on volume with respect to conversions; the higher the conversions, the higher the fee and subsequent revenue earned. CX Digital Media therefore has to not only rely on its affiliates to generate traffic, but the company also has to rely on the advertiser to provide a quality, high-converting product or service and website.

CPM and CPC advertising are typically viewed as being about brand awareness. A brand-conscious advertiser only interested in getting exposure will pay a high profile publisher for impressions or clicks with little regard for their return on investment (ROI). Conversely, CPA advertising is all about the bottom line and generating leads and/or sales. CPA networks typically keep their list of affiliates confidential, and the advertiser forfeits much of that transparency and brand consciousness in return for the sales or leads generated by those affiliates.

Originally viewed as a means for an upstart company or individual to build their business, CPA advertising is now utilized by major branded corporations around the world and is recognized as an efficient, low-risk method of maximizing sales and minimizing expenses.