CPA marketing

Cost per acquisition (CPA) marketing is an online advertising model which involves an advertiser paying a third party to advertise the advertiser’s product on their website or blog, but only paying when an acquisition (or specific Action) is made by the customer.

The over-reaching advantages of CPA marketing are two-fold

  • The marketer only pays for advertising when the agreed upon action (usually an acquisition) takes place.
  • The marketer is able to reach their core, niche market when they team up with the right blogger or website

An Example of a CPA affiliation

Imagine Joe sells specialized socks for cyclists, and Paul has a cycling blog with thousands of dedicated followers. Paul writes an article about the benefits of Joe’s socks and promotes Joe’s online store with a banner or link.

Every time a customer clicks through to Joe’s Website from Paul’s blog and makes a purchase, Joe would have to pay Paul the agreed upon fee or commission.

Not all “acquisitions” are sales. The agreed upon acquisition could be a sign up to a newsletter, submitting a form or clicking though to a specific page.
To track the CPA and ensure that Paul receives his payment, the link he uses will have a specialized hyperlink with an ID code embedded in it. This is called an affiliate hyperlink.

The benefits of a CPA affiliation

A CPA affiliation can be hugely beneficial to both parties. The marketer has their product endorsed and promoted by someone who already has the trust and attention of their target audience without having to spend the time and money usually involved in building a marketing campaign, and the affiliate gets to be remunerated to blog (or in some cases Instagram or post) about and promote their chosen topic, which is often a passion project.

How to get Started with CPA Marketing

You may think the first thing you need to do is find an affiliate – but actually, it isn’t

Determine how much you can afford to pay your affiliate

The first thing you need to do is figure out how much you can afford to pay per acquisition. The more you’re willing to pay – the higher quality affiliate you’re likely to attract. What percentage of each acquisition value are you able to pay them and still turn a profit and remain competitive in the market

Some factors to take into consideration include what you would be paying in advertising usually, what your profit margin is and how much additional traffic you are likely to gain through the affiliate. It is a good idea to do some market research here and find out what similar companies to yours are paying.

Determine who your target Audience is

If you haven’t already done so, you need to sit down and figure out exactly who your buyer persona’s are. Where do they shop? What kind of online content do they read? Who are they following? What are their interests? What is their income bracket? What brands are they loyal to currently? Are they more concerned with brand loyalty, value for money, or combination of both?

Only once you have your buyer persona’s firmly in place can you start to think about what kind of affiliates you should be partnering up with. You may be surprised by the outcomes – this process should never be skipped

Make a list of suitable affiliate

Once you know all about your buyers, you can start to look at who would be a suitable affiliate. This should be someone who your potential buyers already follow and trust. You will need a list of possible affiliates. If one of your competitors is already using someone then you will probably find that they will be unwilling to move to your brand instead – so look near them and find someone in a similar vein.

While smaller influencers may not have the same traction as the big names, they are likely to cost you a lot less to sign up – so don’t be afraid to experiment with an up-and-coming influencer. Just remember that you get what you pay for.

Join a CPA Marketing Network

If you’re very new to online marketing and the idea of drawing up your own contracts and agreements and finding the right influencer is enough to send you into a panic – then you may want to consider joining an affiliate marketing network instead. There are many advantages to joining a network

  • They will have a vetted list of affiliates, websites and other online forces
  • Many of them will take care of setting up everything for you
  • They will set you up with all of the links and tracking code you need to keep track of your CPAs
  • They will keep track of acquisitions made and be able to provide you with statistics
  • Essentially, they take care of the whole process for you – the only disadvantage is that they take their cut from each acquisition, too
  • They mitigate the risk factor for all parties by doing due diligence before any agreement is set up

Some well trusted CPA networks to consider include:

Creating your own Tracking System

If you choose not to use a CPA network, you may want to build your own tracking system so that you can keep track of your acquisitions. Most platforms such as Magento have many resources available to you – or you can commission a developer to produce one for you.

Make sure that your developers understand that you need to be able to track sales statistics back to specific links.

Then it will be up to you to find the right affiliates and websites to share your products – and it will also be up to you to set up a legal agreement with them. It’s a good idea to start with a trial period of not longer than three months to do a first assessment as to whether you are a good match for each other. This is in best interests of both parties.

If it goes well, you may soon find yourself being approached by other potential affiliates who wish to promote your products for a profit.