Cost Per Action
Cost per action is a payment method in online marketing. The advertiser pays when a potential customer performs an action on a website. This can be a download, a phone call, submitting a form or clicking a specific section of a page. Cost per action is often abbreviated as CPA and often mistaken for cost per acquisition.
Background
Similar to cost per click, cost per action denotes a particular user action resulting in compensation or the calculation of cost. The advertiser can measure or expect specific user actions. In contrast to the CPC model, the cost per action model is not primarily aimed at getting a purchase.
Purpose
Cost per action can be used in many ways. Actions that an advertiser can pay for include:
- Downloads: Software companies can pay for users downloading their programs from download portals
- Sending out contact forms: For example, insurance comparison websites can attract new customers; also known as cost per lead in this case
- Newsletter subscriptions: New subscribers can be obtained through promotional activities and their numbers can be predictably increased
- Participation in a raffle
- Phone calls: in this case, also known as cost per call
- Purchases: in this case, also known as cost per acquisition
Benefits
Cost per action gives advertisers the advantage of highly targeted advertising and they only have to pay for actually accomplished services. In contrast to the CPC method, cost per action is harder to manipulate. Customers reached with CPA campaigns usually have a higher involvement than contacts acquired by clicks only.
Since the cost per action method promises greater advertising success, overall cost is therefore usually higher than that of pure click or display campaigns.