What is CPA Marketing? An Ultimate Guide - Alibaba Seller

Alibaba.com OCTOBER 27, 20238 MIN READ
What is CPA Marketing? An Ultimate Guide - Alibaba Seller

There are so many acronyms in marketing. While you probably know that CTA stands for Call for Action and B2B means Business to Business, you might be wondering what CPA in marketing means.

CPA or Cost-per-Action is a type of affiliate marketing that can help convert a vast audience and improve your ROI. Let’s glance at what CPA marketing is, why it’s beneficial, and tips for becoming a successful CPA marketer.

What is CPA marketing?

CPA Marketing is a form of affiliate marketing where an affiliate partners with an advertiser. In this arrangement, the affiliate provides marketing services for the advertiser and earns a commission only when a customer takes a specific action.

Some of the actions can include clicking a link to:

  • Watching a video
  • Buying a product
  • Requesting a quote
  • Filling out a form
  • Signing up for a free trial
  • Subscribing to a newsletter
  • Taking a survey
  • Creating an account

CPA is a low-risk and effective form of marketing because it prioritizes lead generation and high conversion over impressions and clicks. Before moving on to other details, you should note that CPA marketing involves payment after sale, and it’s different from other marketing tactics where companies pay before advertising.

How CPA marketing works

The process of CPA marketing is simple:

  • A business owner who wants to promote their product finds an affiliate on a CPA network.
  • They provide detailed information such as action required from the audience, commission rate, and product details.
  • On the same CPA network, the affiliate browses for offers and chooses one that matches their niche or audience. Then, the affiliate contacts the business owner to accept the offer.
  • After reaching an agreement, the affiliate places the ad on their website or wherever they have an audience and waits for customers to visit the site.
  • When a customer clicks on the ad and takes an action (e.g. filling out a form), the system records the action.
  • Then, the advertiser pays for the ad and the affiliate gains credit.

Sounds simple, right? Because it is!

Another thing to keep in mind about CPA marketing is that CPA marketing requires 3 main players:

  1. Advertisers

    An advertiser is a business owner or company that needs the services of an affiliate to market a product or service. The advertiser creates an offer and instructs the affiliate on what action they want a user to take.

  2. Affiliates

    An affiliate is usually an influencer or relevant blogger capable of creating good content and already has many followers and influence. They help advertisers promote a product or service on various marketing channels and receive a commission every time a user completes an action on the advertisers' website. The job of an affiliate is to create campaigns for advertisers on a traffic source and get users to take action.

  3. Networks

    A CPA network connects affiliates with business owners who want their companies promoted. In other words, a CPA network acts as an intermediary between the affiliate and the advertiser. These networks collect a large number of affiliates, making it easy to find an affiliate for your promotion. All networks are not created equal, and the ones you choose often determine the quality and cost of your marketing.

Another major player associated with CPA marketing is visitors. These are the people the affiliate promotes to and they help them earn a commission by completing a specific action.

3 categories of CPA marketing

CPA marketing offers different pricing models, categorized based on the type of action required to earn a commission. The 3 main categories of CPA marketing are:

Pay per Sale

In this model, the advertiser pays the affiliate a percentage of the product’s sale price when a customer purchases an item. The publisher only gets a commission when a user clicks on the ad to make a purchase.

Pay per Action

Another category of CPA marketing is pay-per-action, where the publisher receives a commission when a customer takes a specific action. This action could be anything from visiting the advertiser’s website, signing up for a free trial or scheduling an appointment.

Recurring payments

In this category, a publisher earns a commission every time a customer makes a repeat purchase. The other CPA marketing categories (Pay Per Sale and Pay Per Action) involve a one-time commission when a customer makes a purchase or takes an action. However, with Recurring Payments, the publisher earns a commission every time a customer returns to purchase a product from the advertiser’s website.

In some cases, recurring payments involve getting regular commissions by helping an advertiser attract new customers regularly.

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Benefits of CPA marketing

CPA is fast becoming a popular marketing start. According to a report, the US CPA marketing expenditure went from $5.4 billion in 2017 to $8.2 billion in 2022.1 There is a reason people are paying for this type of marketing, and it’s because it offers excellent results and benefits.

Some of the benefits of considering a CPA marketing for your business include:

High conversion rates

CPA marketing offers the opportunity to expand your marketing reach, convert many customers, and increase your ROI. This form of marketing provides high conversion rates and a high ROI to get a return for your money and efforts. According to a report, affiliate marketing can deliver up to 58% higher average customer revenue.2

Low risk for advertisers

One of the main benefits of CPA marketing is that it has a very low risk. As a marketer, you won’t pay for traffic that doesn’t result in conversions. This arrangement ensures that every referral you get from an affiliate generates value for your business. CPA marketing puts the risk on the affiliate or publisher, who has to draw in customers to earn their money.

In addition, CPA marketing requires no upfront payment, and it’s easy to start with it.

Wide range of offers and verticals

CPA marketing provides different offers and promotional methods, so you have many options. There is also a diverse range of verticals like coupons, games, healthcare, videos, music, antivirus, etc. This means advertisers can easily find affiliates relevant to their audience.

Easy to use

It’s very easy to set up CPA marketing. All you need to get started is to choose a CPA network and an offer.

How to become a successful CPA marketer

As highlighted earlier, CPA marketing offers many benefits, including improved brand visibility and increased sales. For affiliates, CPA marketing is a great way to earn money.

Here are some tips for becoming a successful CPA marketer:

Choosing the right CPA network

One of the best ways to improve your chances of becoming a successful marketer is by choosing a reliable CPA network. You can find networks by researching different sites and scoring them based on information like reviews, payment, industry, and sign-up process. You should also check for perks like newbie-friendliness, dedicated support, fraud protection, tracking capabilities, and secure payment.

Selecting profitable CPA offers

Once you have the network, your next step is to find profitable offers. Review all CPA offers and pick something that interests or resonates with you. For example, if you run a beauty blog, it might be better to promote an offer in the beauty industry rather than promoting a tech company. Always select and apply to CPA offers relevant to your audience and niche to increase the chances of getting clicks.

Utilizing the best marketing strategies

You can implement different marketing strategies to bring more people to your website to increase the chances of users clicking on an ad. Some effective marketing strategies to consider include SEO marketing, PPC ads, and social media marketing.

Final thoughts

CPA marketing is a great and effective strategy to boost traffic and build a successful brand. It is a marketing model where you make payments only when the visitor takes a desired action.

Now that you understand what CPA in marketing is, you should consider implementing other marketing strategies to promote your product (or service). One of the best ways to improve your marketing strategy is by utilizing Alibaba.com’s marketing tools, like keyword advertising and PPC, to promote your business.

Also, this B2B platform is a great place to sell and find customers worldwide. No matter the type of goods you want to sell or the audience you want to sell to, be assured that you will find it on Alibaba.com.

If you don’t sell on Alibaba.com yet, now is a great time to create an account and promote your brand. Want to own your storefront and reach millions of customers? Join Alibaba.com today!

1. https://www.statista.com/statistics/693438/affiliate-marketing-spending/
2. https://99firms.com/blog/affiliate-marketing-statistics/