Cost per Action (CPA)

What is cost per action (CPA)?
Cost-per-action (CPA) is an online advertising marketing strategy that allows an advertiser to pay for a specific action taken by a potential customer. A CPA campaign involves relatively little risk for the advertiser, as payment only has to be made when a specific action takes place. CPA offers are most common with Affiliate marketing connected. Cost-per-action is also known as cost-per-acquisition (CPA).

In the CPA model, the publisher assumes the maximum risk, since the income depends on good conversion rates. Because of this, selling on a CPA basis isn't as desirable as selling ads on a cost per impression (CPM) basis. Some publishers with excessive inventory often fill them out with CPA ads. The effectiveness of the advertising inventory acquired by an advertiser can be measured using effective costs per action or eCPA.

The eCPA indicates the exact amount the advertiser would have paid if they had purchased the inventory based on a cost per action. Sometimes CPA is referred to as 'cost per acquisition' because most promotions are sales. In other words, the advertiser has won a new customer.

Technically, a CPA deal could involve any action, not just customer acquisition or sale, but in practice CPA means selling. If the action is a click, the sales method is known as CPC. If the action is a lead, the sales method is known as a CPL.

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