The term ‘cost per action” (CPA) is an online advertising digital marketing strategy that allows an advertiser to pay for a particular action from a potential customer. Carrying out a CPA campaign is relatively low risk for the advertiser. This is because payment only has to be made when a specific action takes place. CPA campaigns are most commonly associated with affiliate marketing. another name for ‘cost per action’ is ‘cost per acquisition’ (CPA).
In the CPA model, the publisher shoulders the maximum risk as income is dependent on decent conversion rates. Owing to this, selling on a CPA basis is not as attractive as selling ads on a CPM (cost per impression) basis. Some publishers who have extra inventory will often fill it with CPA ads.
The efficacy of advertising inventory purchased by an advertiser can be gauged using effective cost per action or eCPA. The eCPA shows the exact amount the advertiser would have paid if it had bought the inventory on a cost per action basis. Technically speaking, a CPA deal could involve any action, not just a customer acquisition or sale. However, in practice, CPA means a sale. When the action desired is a click, the sales methodology is referred to as CPC, and when the action is a lead, the sales method is referred to as CPL.