What Is Cost Per Action Or CPA Ad Model?

A CPA or cost per action ad model is sometimes referred to as “per acquisition cost”. which is related to the fact that many of the actions that advertisers use are related to profits. (new customers by sales), although this has led to confusion in the marketing industry about the exact definition of a CPA. Besides the confusion, “costs per acquisition” can be used when it is actually the cost of customer acquisition (CAC). Its example include actions taken by the customer such as:

 

  • Sign-up
  • Registration
  • Email interaction
  • Live interaction
  • Form submission etc.
If you use paid advertising method. Then, you have to pay for any of the actions mentioned above.
 
 

 

CPA explained

How to calculate cost per action?

 

cost per acquisition formula
 

Or,

 

cost per action formula

 

Costs for each action (CPA) are calculated as the costs divided by the number of actions measured. So for example, if the amount spent is $ 180 per campaign and the actions targeted for this campaign are 20, this could give the campaign a cost per $ 9 action.
 

How to track a CPA campaign?

Since the payment of CPA campaigns is still an “act”, accurate tracking is very important for media owners.
 
This is a complex subject in itself, however, when it is usually done in three main ways:
 
  • Cookie tracking – when a media owner dials with the click of a cookie it drops to a trusted computer connected to the media owner when the “action” is performed.
  • Call tracking – different phone numbers are used for example of a particular campaign. Media owner XYZ will therefore have his or her unique distribution phone number. and when this number is called any “actions” that result in the delivery of media owner XYZ. Payment is usually based on the length of the call (usually 90 seconds) – if the call exceeds 90 seconds it is considered that there is a real interest rate and a “payment” is made.
  • Promotional codes – promotional or voucher codes are widely used in marketing campaigns. Hope you are asked to apply the code in exit to qualify for the offer. The code can also be compared to the media owner who drove the sale.

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