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Glossary – CPA (cost per action)

CPA (cost per action)

Nikiforov Alexander
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What is CPA?

CPA (cost per action) represents the cost of one targeted action by a user, making this metric an important tool in the world of digital marketing. It is used in two main aspects:

  • Evaluation of advertising campaign effectiveness. The more users take targeted actions within the set budget, the more successful the promotion is considered.
  • Payment model. Advertisers pay only for results, meaning the actual completion of a targeted action, rather than the number of impressions or clicks.

Types of CPA

There are several types of CPA, depending on the advertisers' goals:

  • CPO (cost per order) or CPS (cost per sale) — payment for a sale that occurs only after a successful purchase.
  • CPL (cost per lead) — payment for a lead, where the outcome is the acquisition of potential client contacts through form fills, calls, or messages.
  • CPI (cost per install) — payment for installation, which includes downloading applications or installation files.
  • CPV (cost per visit) — payment for visiting a specific page, watching a video, or exploring information on a website.

How is CPA calculated?

To determine CPA, the following formula is used:

CPA = advertising costs / number of actions

For example, if a beauty salon owner spent 15,000 rubles on an advertising campaign and received 50 leads, then the CPA would be 300 rubles per lead (15,000 ÷ 50).

It is important to remember that not all leads convert into customers, and the conversion rate can vary across different industries. For ease of calculations, online calculators or data from advertising dashboards can be used.

Who is the CPA model suitable for?

The CPA model is particularly effective for companies offering mass-market products at competitive prices. It is most commonly used by:

  • Online stores
  • Online gaming platforms
  • Betting companies
  • Travel agencies and booking services
  • Online courses

However, CPA is not suitable for niche companies, such as manufacturers offering specialized products like bakery equipment.

How do CPA networks work?

CPA networks act as intermediaries between advertisers and webmasters. They find resource owners and enter into agreements with them to place advertisements.

The advertiser posts an offer, which becomes available for webmasters to fulfill. After a client arrives from a specific resource and completes a targeted action, the webmaster receives payment.

Fraud in CPA networks

Various types of fraud can occur in CPA networks. There are two main types of payment models: fixed and percentage of sales. The choice depends on the price category of the products and the advertisers' goals.

CPA networks can perform additional functions, such as analyzing advertising effectiveness, creating promotional materials, and counting targeted actions.

How to choose a CPA platform?

When choosing a CPA platform, it is recommended to turn to well-known networks with a good reputation. It is important to consider:

  • Integrity and reliability of the network
  • A wide selection of offers
  • Attractive rates
  • Effective customer support
  • Timely payments

Advertisers should pay attention to user reviews and the network's reputation, as well as its approach to preventing fraud.

Popular CPA networks, such as Admitad, Affstar, and others, can become reliable partners for the successful promotion of goods and services.