CPA or CPS: which model is more profitable?
KIT CPA affiliate network managers are launching a series of posts about affiliate marketing. The articles will highlight methods of selecting and evaluating the effectiveness of products, new promotion technologies and technical aspects of the affiliate business organization. Today we will discuss the differences between payment per action and payment per sale. The article is based on the Feedfront.com online magazine.
Throughout the web one will come across a misconception that CPA and affiliate programs (affiliate networks) are the same thing.
Main differences
As the name entails, CPA implements payment per action taken by the user. It is appealing to online ad campaigns where a certain action like filling out an online application with personal information (name, e-mail), signing up in the system, subscribing to the newsletter, downloading files, watching videos. Thus, Cost per Action in its pure form is not directly focused on making some profit and is rather suitable for promotional campaigns for generating leads or free trial offers, as well as for websites whose monetization scheme is based on a user database (dating websites, online games).
Affiliate networks are intermediaries between sellers and partners. The product offered by the seller is integrated into the affiliate network. Then, the most suitable products are selected from the affiliate database, with the traffic targeted for the promotion of such goods and services. The promotion of goods by affiliates is conducted using to the cost-per-sale (CPS) model. Here,the affiliates are paid a percentage of each purchase made through the network. Meanwhile, it is usually possible to organize promotions using the pay-per-action model within the affiliate network.
If more volume is needed
It is important for the seller to understand that affiliate networks are not affiliates and do not participate in any affiliate program as affiliates would. They offer your product up for promotion in their affiliate base. In addition, an increase in traffic and sales does not necessarily appear right after your product is placed in the affiliate network, or at least not immediately. A CPA campaign can lead to a significant and rapid increase in traffic. It can be carried out in just 48 hours - from the very start to the very end. Sales growth is usually delayed by 1-2 months from the moment you product is placed in the affiliate network. Compared to such CPA features, affiliate networks should be considered as a longer-term cooperation, providing sellers with high-quality traffic and sales over a long period.
Our statistics are correct
Real-time tracking of user actions is essential for sellers. CPA networks most often insist that real-time monitoring enables you to determine the number of target actions taken throughout the campaign. The affiliate network, just like the CPA network, relies on real-time monitoring, however, the seller's representative has the right to decide which of the transactions in the submitted report are valid, and which do not meet the seller's requirements, and thus are not subject to payment.
We only slightly touched upon the differences between CPA and CPS payment systems. Although both types are of concern to sellers, it is important to define your goals before you start looking for an affiliate. Eventually, this will have a positive impact on your business.
If you have any questions about the article, do not hesitate to write or call our affiliate managers. They will answer all the questions and give consult you.
