What is the cost per action advertising and how it connects with SEO?

Merchants, who tried a lot of marketing strategies to advertise their products online, know that it is quite difficult to find an effective method for a reasonable price. There is no golden mean; you have either high pricing per click or low traffic flow. However, those who have tried CPA (cost per action) marketing know that it is one of the best ways for affiliates to maximize their profit. In this article, we are going to discuss all primary aspects of cost per action SEO and marketing. 

What should you know about cost per action advertising?

There are three primary ways of conducting online advertising campaigns - CPM (Cost Per Millennium), PPC (Pay Per Click) and CPA (Cost Per Action). 

Cost Per Millennium or Cost Per Thousand Impressions refers to advertising bought by impressions. If a web source publisher charges $2,00 CPM, that means that an advertiser must pay $2,00 for every 1,000 impressions of its ad. 

The standard way to measure the success of CPM is by counting click-through rate. CTR is the ratio between the number of times the ad is clicked and the total number of ad impressions. 

PPC (Pay Per Click) is a standard model of internet marketing according to which the advertisers pay a fee each time one of their ads is clicked. In other words, this advertising model presents a way of buying visits to a web source. According to this model, advertisers bid for ad placement in a search engine’s sponsored links when someone searches for a keyword which is related to their business offering. 

And the third advertising model is CPA (Cost Per Action). It is also called cost per acquisition, pays per action, and performance-based advertising. According to this advertising model, you get paid when someone clicks on your affiliate link and completes an action. A user is clicking on your ad and signing up for a free trial of a product, registering for a free download, or purchasing your stuff. These signups and purchases will generate your company leads and maximize business revenue. According to this type of advertising, you pay for the host services and a fee for each specific type of actions on your site that lead to conversion. 

How can you benefit using Cost Per Action ads?

First of all, it is worth to mention that this type of advertising is less risky than other advertising models. You pay only for the real user actions that lead to conversion. That is why using this type of advertising you do not lose anything. Moreover, you protect yourself from wasteful clicks that won’t convert, as well as click fraud. 

What are the possible risks concerning Cost Per Actions ads?

If you have low lead to sales ratio, you can get a low return on investments using this type of advertising. So, if you pay publishers more for leads than you are generating from sales revenue, you will most likely lose your money. In this case, you can switch over to a CPA campaign based on sales. 

One more thing you should know about CPA ads is that if you don’t have a strong track record for the specified type of action, your publishers may decide to host ads of more potential sources who can bring them higher revenue.