Cost per action, or CPA, is the amount paid when a
visitor does whatever he or she is meant to do -- ie.
sign up for a newsletter, fill out a form, or make a
purchase.
For example... let's say a company contacts you for a
CPA campaign. They sell merchant accounts. You place
their link or banner on your site, along with whatever
tracking code they provide you with. Their goal is to
get some of your visitors to fill out a form so that
they can "follow-up" and hopefully make a sale. This
is what they propose to pay you for.
So even if you send ten thousand visitors to their site,
you ONLY get paid for those that fill the application
form out in full and submit it. And unless you have an
arrangement with the company, you won't earn a commission
if that person purchases a merchant account from them.
A simple way to think of CPA is to relate it to an
affiliate program. Affiliate programs, by their very
nature, are CPA:
- The example above is a "pay-per-lead" program where
someone just has to fill in a form, not actually
buy something.
- A "pay-per-sale" program (the most common type of
affiliate program) is where you only earn a
commission if a visitor purchases through your
affiliate link.
When you consider a CPA offer like the one you mentioned,
consider whether or not it's going to be profitable --
frankly, you can pick and choose any affiliate program
you like and place text links, endorsements, banners, etc.
on your site and still earn commissions for any leads and/
or sales you personally generate. If your intention is to
sell advertising, though, then the company needs to pay
you to display their ad on your site (in which case you
likely would not receive any commissions for leads or
sales... just the advertising dollars themselves).
