Cost per action (CPA)

Cost per Action (CPA) is also referred to as Pay per Action. This is a pricing model which is very particular to internet marketing. In this scheme, the advertiser is charged for every action taken that is connected to an online advertisement. Examples of such actions would be a visit made to the website, a completed form, or a purchase made.

It is up to the advertiser to come up with a list of “desired actions” for which charges can be made. This is why many advertisers think that CPA is the best model to use: because payments are only given for actions which are actually profitable.

CPA can also stand for Cost per Acquisition. This is so because the intent of most advertisers is to acquire something, especially new customers. In this light, Cost per Acquisition is a more specific term for certain transactions made under the Cost per Action model.

Cost per Action is different from Cost per Lead, because in CPL, it is enough to get the contact details of potential clients. In CPA transactions, payments are usually only made after a sale has been completed. The primary goal of CPA is to ensure the maximum number of closed deals or completed transactions in relation to the amount spent on advertising. This is why CPA is the best option for someone who wants to monitor the return of investment closely, and exercise maximum control over it.

To quantify the effectiveness of other methods used, an advertiser can take a look at the eCPA, or Effective Cost per Action. This shows the difference between advertising costs under a CPA and those from another scheme, such as Cost per Click.

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