In 2010, the US marketing agency Fluent solemnly announced that promotion in social networks will become more effective thanks to performance marketing. The company has confirmed this assumption in practice, having increased its revenue by 850% to more than 40 million dollars already during 2011.
Performance marketing (affiliate, affiliate, CPA marketing) is a promotion model that implies payment for conversion activities. Within this model, marketers use various types of advertising, search promotion, SMM and other approaches.
It is worth noting that the terms "performance marketing", "affiliated" and "affiliate marketing" are commonly used by members of affiliate networks that allow site and blog owners to earn income by advertising the proposed product. The concept of "CPA-marketing" is broader - it means any marketing methods that use the payment model for the lead.
How did the agency Fluent achieve such an impressive result? Promoting projects in social networks, it replaced the standard pay-per-click or per thousand impressions approaches with a CPL or CPA model - pay per lead or action. Fluent provided advertisers with the opportunity to pay for the desired actions of potential customers, for example, a subscription to the newsletter, a printout of promotional coupons, "likes" and sharing services, ordering. In other words, Fluent used CPA marketing.
What is the essence of this discipline and how is its effectiveness determined? This will be discussed below.
CPA (eng. Cost per action - pay per action) - marketing model, which involves payment for conversion action. For example, the brand "ABC" pays for subscriptions to the electronic newsletter, wanting to collect the base of electronic addresses of potential customers. A brand "EYUYA" sells travel vouchers, so pays for applications for the tour, filled with site visitors. Thus, advertisers are the first participants in the CPA model.
A marketing agency and / or online resource that publishes relevant advertising is the second participant in the CPA model. Marketers are rewarded whenever they generate leads. From here went the second name of the model under discussion - CPL (cost per lead). The third party to the model is the consumer.
CPA-marketing ensures the interest of marketers in the effectiveness of project promotion. This explains the high efficiency of the approach.
There are various ways to implement CPA campaigns. The most popular and effective of them are:
- Product promotion through survey sites. Typically, such resources contain information about the advertised products, user reviews, independent ratings and reviews. Each review leads to a separate landing page of the product on the supplier’s website, which is usually a large online store. The site owner receives a reward whenever a visitor goes to the advertiser's site and buys the product. Overview site coffee machines - an example of the resource in this category.
- Use of selling sites or pages. We are talking about both individual resources on one-page pages and landing pages created on large resources. Selling pages tell the audience about the product and stimulate to buy it. In addition, the creators of these pages are trying to get the email address of the buyer. In the context of CPA-marketing, single pages usually redirect the visitor to the seller’s website, where he can place an order.
- Search engine promotion with pay per action. In this case, agencies use content marketing, creating and publishing useful content on behalf of the brand. However, in the CPA-model, it is not the traffic and the position of the site that is paid for, but the leads are the conversion actions of the user.
- Advertising with pay per lead (CPL). This approach to the publication of advertisements differs from the traditional only approach to payment. As noted above, the advertiser pays only for leads, not for displaying advertisements (banners, links) or user transitions.
Benefits of CPA Marketing
The CPA marketing model has become popular due to the ease of measuring its effectiveness. In most cases, advertisers and marketers can easily record online leads, for example, newsletter subscriptions. Difficulties may arise when working with an offline business, but they do not preclude the use of the CPL model.
The main advantages of CPA-marketing are:
- Advantageous for the advertiser model of payment. You spend money only on the desired actions of potential consumers. This allows you to effectively plan your marketing campaigns.
- High performance promotion. Marketers are rewarded only for real leads. Therefore, they will crawl out of their skin to give you the desired result. Compare this approach with pay per impression, clicks, line items, or traffic. These approaches do not guarantee conversions, whereas CPA-marketing is aimed at them.
- Marketers are interested in the continuous development of your resource. In order to increase leads and conversions, they must ensure the technical compliance of the site with the requirements of search engines, regularly publish high-quality informative content, seek response from social networks and bloggers, publish guest materials on high-quality industry sites, create converting landing pages, conduct split testing and other events . In this case, you only pay leads.
- Lack of financial risk. By investing in SEO, contextual advertising or other Internet marketing methods, you risk not achieving the planned result and wasting financial resources. Choosing a CPA-model, you do not risk losing money, because you pay only the result of the work of marketers.
When is it profitable to use the CPA model
CPA-marketing demonstrates the highest efficiency, if the project sells clear to the audience, a relatively simple and well-known product. For example, this model is suitable for online stores selling branded products, or companies operating in the service sector.
The CPL model does not always work when promoting exotic or difficult-to-understand products. In addition, the lead pay model does not work when the advertiser’s proposal does not match the market. For example, if you sell cell phone X for 5,000 rubles, and your competitors sell it for 3,500 rubles, then they will get all the leads and conversions.
Why CPA marketing will dominate
The founder of the agency Fluent, Ryan Schulke, notes that the CPA-model is more effective compared to paying for impressions, clicks, positions and traffic. Using the lead-pay model, Fluent has achieved a significant increase in marketing investment return for its clients. This allowed the agency itself to increase revenue by hundreds of percent in one year.
Of course, CPA is not a new marketing model. However, today it is becoming the most relevant for brands. Why it happens? Over the past few years, search engines have greatly improved their algorithms. In turn, Internet users have long been trying to avoid advertising, which we have repeatedly written.
This closes for business many marketing loopholes associated with the use of extensive models of development and promotion, which, in particular, include SEO, contextual advertising, pay-per-view advertising. The business needs intensive approaches to improve the quality of marketing. The CPA-model applies to such approaches.Looking for guaranteed sales and high-quality business growth? We undertake tasks of any complexity. Performance-marketing is a TexTerra business promotion. chto-takoe-cpa-marketing-i-pochemu-on-budet-dominirovat