Understanding the various acronyms within the digital realm may seem overwhelming, but it is important to understand how to generate the best ROI. Deciding which advertising metric to use is also important in facilitating a transaction that is profitable and beneficial for all parties involved.
So, what is CPA?
Simply put: CPA, or cost-per-acquisition, is an online advertising metric that uses algorithms to optimize for cost per action/acquisition. Most commonly used for conversion-driven campaigns.
Examples of activities that can be included in a CPA (or conversion-driven) campaign can include, but not limited to: An impression, click, form submit (i.e. a contact request, newsletter sign up, registration, etc.) and more.
The goal for publishers is to achieve the best results for the advertisers serving ads on their sites. CPA is a good metric to choose when the goal is to show results, as applied to purchases and conversions. Advertisers like because it protects them from click fraud and against paying for visitors that are unlikely to convert. They’re only paying when a conversion is completed.
CPA benefits publishers because their advertisers are likely to pay more for a completed conversion, then for a single impression. Therefore, cost-per-action enables publishers to generate higher revenue.
Choosing an advertising metric that benefits both parties in the transaction is a better option than one party feeling like they got the short end of the stick. It is important to see which advertising metric is best for you and your business, as well as your partner.