What are all these abbreviations?
Working in affiliate marketing, with the same result of advertising campaigns, you can get a different amount of payment depending on the established model. In total, there are 5 payment models, but the most popular of them are cash on delivery and cost per target action.
COD (cash on delivery). The essence of the model is that a person pays for the goods after they pick them up from the post office, and not in advance. Most PP use this model, especially for nutra offers. COD affiliate network is more profitable for customers, as they understand that they do not take risks when ordering goods. The affiliate marketer can withdraw the reward for the lead not immediately, but as soon as the PP checks the redemption of goods from the mail.
CPA (cost per action) is a model where payment is made for a targeted action, that is, an agreement to purchase a product. PP pays the affiliate marketer only for those leads that, when talking with the manager, confirmed their purchase. They are also called approved leads. The target action can be filling out the form, ordering a callback, downloading the application, registering on the site. For the customer, the CPA model is one of the most transparent payment models.
What product to sell with CPA networks
For advertisers, working with a CPA network is very convenient and efficient. It is engaged in processing orders and selecting new product ideas whereas affiliate marketers take on the search for new customers and advertising goods. In the CPA network, you can sell almost anything. The main thing is that there should be a demand for it. You should choose a product according to the following criteria:
● products that the client can afford without much expense: inexpensive cosmetics, accessories, toys;
● products with unusual functions, for example, USB fan watch;
● products that quickly and effortlessly solves some problem: powder for weight loss, a remedy for joints;
● products for people who have hobbies, for example, accessories for drivers or fishermen.
The advertiser, choosing a product for buyers on the landing page, should take into account that its price includes not only the cost and profit, but also the costs of processing and delivering the order, as well as the affiliate marketer’s remuneration in the network.
Now there are a lot of CPA networks and you can encounter those who are unscrupulous about it. When choosing a CPA network, the advertiser and affiliate marketer should pay attention to the availability of especially favorable rates on offers, the hold period, the variety of geos, the total number of partners in the network, as well as the presence of built-in anti-fraud tools etc.
CPA network costs
CPA model allows you to effectively use the budget for product advertising – the advertiser pays not for conditional clicks and impressions, but for potential customers who performed a targeted action with your product. The cost of the market is directly dependent on the actions of customers. This can be payment for a sale, leads, installation or visit to landing pages.
The largest items of expenditure fall on the payment of rewards to affiliate marketers for referred clients. Usually this is a fixed percentage of the sale. Also, the advertiser’s considerable costs fall on calling and squeezing customers, as well as paying for the CPA network for the fact that it posted your offer and brought you together with affiliate marketers. A good affiliate network is somewhat reminiscent of marketplaces, only there are offers instead of goods and affiliate marketers instead of buyers.
Working in affiliate marketing, the biggest misconception is the expectation of instant profits. In fact, in order to make a profit, the affiliate marketer must test a lot of bundles and advertising campaigns, spending their own money. So an important factor in success in this area is determination and willingness to take risks, spend the budget until you can build the necessary strategy and bring the offer to the plus.
How CPA differs from contextual advertising
Contextual advertising is presented in the form of banners that are shown in search engines, as well as on partner sites of these systems. This type of advertising involves payment for clicks and impressions. But a person who visits the site does not mean a potential customer, so you can get high conversion rates, but not sell a single product or service.
Using the CPA model, you pay for the target actions you need, for example, an order on the site, and get the desired result. Thanks to CPA, advertisers have the opportunity to attract a large amount of traffic in a short time. Each advertiser has its own traffic requirements, especially for nutra advertisers, given the peculiarity of the offers, and the CPA model takes into account such requirements. Traffic received through email newsletters is not welcome, since most emails go into the spam folder, which means the money gets wasted. And most advertisers are against affiliate marketers using garbage channels for advertising. These include pop unders, clickers, brand queries and motivated traffic.
Working in affiliate marketing, the cost item may differ, depending on the target action of users. The CPA payment model is the most effective for advertisers and transparent for affiliate marketers. With this model, you should choose the product in demand. The CPA model in relation to contextual advertising allows you to quickly get the desired result and not waste the budget.