The Myths and Realities
of CPC vs. CPA in Affiliate
Marketing
To be successful, affiliate marketers need a com- prehensive understand- ing of the myths and
realities associated with both model
types — cost-per-action (CPA) and
cost-per-click (CPC). Both have unique
benefits and drawbacks, so trying to
compare the results of one method versus the other isn’t always straightforward.
Separating such myths from the reality is the first
step to helping affiliate marketers maximize productivity
and increase their profitability.
Myth: CPC is risky. CPA is safer.
the Reality: CPC payouts can increase or decrease
depending on: a) quality of the referred click; and b)
advertiser bid pressure. Although unpredictable at first,
the more time spent within a category, the greater
understanding there is around the different ranges to
expect. The advantage here is that if quality is high,
the competitive bid pricing by advertisers can offer an
affiliate better upside than any other model. Affiliates
also benefit from being able to leverage a single creative
backed by many different advertisers thus avoiding unnecessary re-directs.
CPA can be very profitable for affiliates, particularly
if they have a targeted audience that is receptive to
their message. Having a strong brand name can be very
appealing and compelling to consumers, but it can also
be risky. While payment is constant for the specified
action, it is often more challenging to persuade enough
people to act than click. This can lead to over-depend-ence on the advertiser to ensure creative is enticing and
that landing pages are highly customized to guarantee
the desired action.
Myth: Branded CPA creative will always drive a better yield than a category-based CPC creative.
the Reality: The ability
to get granular within a specific category and give it the
right context can make a big
difference. Which do you
think would be more appeal-
ing to a consumer — a non-branded
creative for the actual training
course or one for a well-known
establishment that may or may not
feature the individual’s preferred
course of study?
As an affiliate, you know your audience best
and subsequently should determine which crea-
tive would generate the best response.
Myth: CPC or CPA? It has to be one
or the other.
the Reality: In today’s dynamic and
challenging environment, affiliates must
use every available resource to achieve
their ROI goals. CPA and CPC are effec-
tive on their own, but when used as complementary
tools, they can transform an affiliate marketer’s business
and profitability. As situations change, you must have
the flexibility to utilize both, either in tandem or in
separate campaigns.
Let’s take the example of a heavy-hitting, branded
CPA offer supported with offline activities through TV,
radio or print; these efforts in tandem are more likely
to generate the necessary action due to the advertising
buzz being generated. As the product category becomes
even more established, a CPC campaign in that same
sector would be the natural complement to an affiliate’s
marketing plans.
An emerging trend now means affiliate marketers no
longer have to choose between one or the other. A few
key networks are starting to offer both CPA and CPC
models, giving affiliates the flexibility and diversification
they need to find the right fit for each scenario. With
many advertisers’ media plans utilizing multiple options,
this is particularly timely and valuable.
Affiliate marketers need to assess their campaign
objectives, from clicks to sales, and have the knowledge
and ability to deploy each of them selectively depending
on the situation. In addition, when deciding which network to employ, affiliates should evaluate the expertise
offered by account managers to ensure they are able to
receive the right guidance and advice to achieve their
individual goals. ■
