CPA Advertising Pricing Models Explained
Today’s digital marketer has more options at their fingertips than ever before for user acquisition. Long gone are the days when you were limited to choosing between paying for views or clicks, as today’s performance marketing world has evolved into one of the endless opportunities with many CPA pricing models to choose from.
While in some instances, paying for views or impressions is still appropriate, the majority of performance marketers find themselves considering these common pricing models: CPA, CPI, CPE, CPL, CPS and CPC.
CPA: Cost-Per-Action, Cost-Per-Acquisition
Definition – A cost-per-action (CPA) pricing model allows marketers to only pay affiliate partners or publishers once a new user is acquired or a specific action is completed.
These actions range from form fills and subscription sign-ups, to making a purchase or downloading an app, depending on the marketer’s campaign goals.
When using a CPA pricing model, marketers are allotted a bit more assurance as what they’re paying for will guarantee quantifiable results. With low risk and high reward, it’s clear why so many performance marketers are adopting a CPA pricing model.
The CPA model is typically referred to as an umbrella marketing method that includes more specific pricing models such as Cost-per-Sale (CPS), Cost-per-Lead (CPL), Cost-Per-Install (CPI), Cost-per-Engagement (CPE), and Cost-per-Click (CPC).
Learn how a leading micro-investing app drove a 96% increase in funded accounts month-over-month through a strategic CPA pricing model.
Definition – A cost-per-sale (CPS) pricing model enables marketers to only pay affiliate partners once a user has purchased a product or service.
The CPS pricing model is one of the most popular performance marketing models. CPS reduces vulnerability to fraud by banning IP addresses with fraudulent behavior, making it one of the most cost-effective and secure marketing methods.
CPS campaigns are a great option for traditional product offerings, as they allow marketers to track each individual sale driven. This pricing model has proven to be very successful within the e-commerce space. Check out how this popular e-commerce brand achieved a 210% increase in revenue with Perform[cb] Agency.
Definition – The cost-per-lead (CPL) pricing model requires marketers to pay only once a user provides personal data as specified by the marketer, thus converting the user into a qualified lead. Common data collected includes name, email, and/or zip code. This data can be obtained through several conversion points, including form fills, PDF downloads, newsletter sign-ups, and survey completions.
This pricing model is popular for marketers looking to acquire and target a database of qualified leads interested in certain products or services. In customer acquisition marketing, qualified leads are consumers that are most likely to convert into paying clients. Many marketers find success when using a CPL pricing model to create member acquisition programs with lead nurturing strategies.
Check out how QuoteWizard drove a 92,000% increase in high-quality leads from Q1-Q4 by utilizing a competitive CPL pricing strategy.
CPE – Cost-Per-Engagement
Definition – The cost-per-engagement (CPE) pricing model drives users to interact and engage with a marketer’s product, service, or app.
The CPE pricing model is most commonly used for post-install events specific to mobile apps. At Perform[cb], this model is only applicable to app-install offers, including events such as registration or in-app purchases.
Based on the desired engagement specified by the marketer, CPE campaigns have the ability to be highly targeted, which can increase the overall quality of converting users.
Definition – The cost-per-install (CPI) pricing model is used by mobile marketers looking to increase mobile app installs. This model is one of the most widely used for all mobile user acquisition campaigns. The CPI model is perfect for app marketers focusing on driving installs and acquiring more active users.
Learn more about how a strategic CPI campaign led a well-known car insurance app to drive a 75% increase in new user acquisition month-over-month.
Definition – The cost-per-click pricing model is one of the most common CPA pricing models used as it’s a quick way to drive traffic to a landing page. A CPC pricing model pays when a user has clicked on an ad and then redirected to the marketer’s desired landing page.
Since the early days of digital marketing, clicks have been used to measure ad effectiveness, as it indicates users’ interest in a product or service. Payment is based on the user’s interaction, or click, rather than the number of impressions, or views, driven. Users are not expected to complete a conversion, as marketers are simply looking to drive interest and traffic. The CPC pricing model is commonly used for targeted communication exposure.
Interested in integrating any of these pricing models into your marketing strategy? Perform[cb] uniquely offers all the above options for your performance marketing program. Reach out to our team of experts today to discuss how we can team together to maximize your ROI.