Analyzing CPA
There are primarily 2 types of CPA offers:
* Cost Per Action
* Cost Per Acquisition
Cost Per Action: This is where someone gives up their email address, zip code, cell number or some other form of information and then you get paid.
Cost Per Acquisition: This is where you get paid when the prospect actually converts into a sale (ie. money changes hands and they physically make a purchase of the product / service).
The truth about CPA is the fact that you will not profit from it straight away. Even the most seasoned professionals take a hit, and thereʼs nothing you can really do about it. This is because the market is ever changing, and itʼs all about testing and tracking, making changes, then testing and tracking some more until you find the ideal zone.
Approaching the CPA with an open mind and an attitude to face losses is the first step. expect to spend some money testing and then if the conversions are not there, change out text / banner ads, change landing pages, and even change the offers youʼre promoting until you find the right advert and product combinations
which work.
Once you find the right combinations and the conversions are coming in, then you know youʼll be safe ramping and scaling up your campaigns. If theyʼre not converting and youʼve made loads of changes then itʼs most likely time to move onto something else.
The other thing to take into consideration is that you probably wont find that the first offer you push and test will be profitable, you may have to run multiple offers from multiple merchants to find the right one.
There are a few essential things you need to review when choosing an offer:
* The payout
* If itʼs time restricted or capped in any way (you donʼt want to be paying PPC costs on an advert sending people to a closed offer!)
* How long it takes you to get paid (following month, locked in for 90 days etc.) Cashflow can be a big issue with CPA.
* How long the cookie lasts for. Most times itʼs around 30 days, but you want to be wary of session cookies (only valid for the time the prospect is on the site) because if they leave and go back later you wont get the commission.
* Any region / country limitations (thereʼs no point sending traffic from the UK for a US only offer, you wont get paid.)
* Any age restrictions (18+ etc)
* Any restrictions on the promotion channels and keyword bidding.
* Is co-registration an option? (Co-Registration is where you can tag one of your own offers or products onto the offer, so that once the prospect has signed up for the CPA promotion they then get sent to your own offer afterwards.)
Making The Decision
The thing you need to be happy with when selecting your offer is the time, effort and money required to get a return on your investment. You also need to weigh up the type of promotion allowed, because you may not have the resources. For example, if the only form of promotion for an offer is email and you donʼt have a list to send the offer to, then itʼs a non-starter.
If youʼre advertising on the placement network or doing contextual advertising then you can direct link straight to the advertisers landing page, but if youʼre doing search advertising then youʼll need to create a landing page on your site to get a good quality score and reduce your CPC.
So when Iʼm reviewing ads, I feed in the commission figures to get a view on the estimated max CPC and then look in Google AdWords to see what CPC I will need to pay to get in the top positions for my advert. If the figures are miles apart then most of the time Iʼll move on to a different offer.
Now this is just one part of my filtering process, because there may be other factors you need to look at which could make the offer worthwhile even if youʼre losing money on the advertising.
For example:
* The advertising may be a loss leader on the commission payout, but in the process you may capture an email address for your list, which you make money on later down the line or cross-sold on other offers.
* You may be able to co-reg the offer with one of your own offers (ie. make a sale of your own complementary products on the back end).
* The commission may be a two-tier payout, and you lose on the initial payout but then later down the line the second tier kicks in and brings up your earnings.
At the end of the day, you wont know if the decision youʼve made is going to bring you stacks of cash until youʼve done test campaigns and tracked to see if the ads are converting into sales.
Remember, start small, weed out any non performers, and then crank up once youʼre getting conversions.
* Cost Per Action
* Cost Per Acquisition
Cost Per Action: This is where someone gives up their email address, zip code, cell number or some other form of information and then you get paid.
Cost Per Acquisition: This is where you get paid when the prospect actually converts into a sale (ie. money changes hands and they physically make a purchase of the product / service).
The truth about CPA is the fact that you will not profit from it straight away. Even the most seasoned professionals take a hit, and thereʼs nothing you can really do about it. This is because the market is ever changing, and itʼs all about testing and tracking, making changes, then testing and tracking some more until you find the ideal zone.
Approaching the CPA with an open mind and an attitude to face losses is the first step. expect to spend some money testing and then if the conversions are not there, change out text / banner ads, change landing pages, and even change the offers youʼre promoting until you find the right advert and product combinations
which work.
Once you find the right combinations and the conversions are coming in, then you know youʼll be safe ramping and scaling up your campaigns. If theyʼre not converting and youʼve made loads of changes then itʼs most likely time to move onto something else.
The other thing to take into consideration is that you probably wont find that the first offer you push and test will be profitable, you may have to run multiple offers from multiple merchants to find the right one.
There are a few essential things you need to review when choosing an offer:
* The payout
* If itʼs time restricted or capped in any way (you donʼt want to be paying PPC costs on an advert sending people to a closed offer!)
* How long it takes you to get paid (following month, locked in for 90 days etc.) Cashflow can be a big issue with CPA.
* How long the cookie lasts for. Most times itʼs around 30 days, but you want to be wary of session cookies (only valid for the time the prospect is on the site) because if they leave and go back later you wont get the commission.
* Any region / country limitations (thereʼs no point sending traffic from the UK for a US only offer, you wont get paid.)
* Any age restrictions (18+ etc)
* Any restrictions on the promotion channels and keyword bidding.
* Is co-registration an option? (Co-Registration is where you can tag one of your own offers or products onto the offer, so that once the prospect has signed up for the CPA promotion they then get sent to your own offer afterwards.)
Making The Decision
The thing you need to be happy with when selecting your offer is the time, effort and money required to get a return on your investment. You also need to weigh up the type of promotion allowed, because you may not have the resources. For example, if the only form of promotion for an offer is email and you donʼt have a list to send the offer to, then itʼs a non-starter.
If youʼre advertising on the placement network or doing contextual advertising then you can direct link straight to the advertisers landing page, but if youʼre doing search advertising then youʼll need to create a landing page on your site to get a good quality score and reduce your CPC.
So when Iʼm reviewing ads, I feed in the commission figures to get a view on the estimated max CPC and then look in Google AdWords to see what CPC I will need to pay to get in the top positions for my advert. If the figures are miles apart then most of the time Iʼll move on to a different offer.
Now this is just one part of my filtering process, because there may be other factors you need to look at which could make the offer worthwhile even if youʼre losing money on the advertising.
For example:
* The advertising may be a loss leader on the commission payout, but in the process you may capture an email address for your list, which you make money on later down the line or cross-sold on other offers.
* You may be able to co-reg the offer with one of your own offers (ie. make a sale of your own complementary products on the back end).
* The commission may be a two-tier payout, and you lose on the initial payout but then later down the line the second tier kicks in and brings up your earnings.
At the end of the day, you wont know if the decision youʼve made is going to bring you stacks of cash until youʼve done test campaigns and tracked to see if the ads are converting into sales.
Remember, start small, weed out any non performers, and then crank up once youʼre getting conversions.
Source...