Recently, some social media platforms had to repay advertisers due to measurement reporting errors. Mistakes can happen, but with cost per action (CPA) advertising, advertisers are only paying when a measurable action is taken, making costly reporting errors less likely and advertisers more confident in their results.
What Is CPA Advertising?
Cost per action or CPA advertising is performance advertising in which advertisers pay only when specific, pre-defined actions are achieved. All actions from CPA advertising are measured and tracked against the objectives and goals of a campaign, regardless of what media channels are being leveraged. An action can include a click, form fill, sale, app download, loyalty program signup or anything else agreed upon prior to campaign launch. Some actions happen as the result of engagement with ads, while other actions may occur after driving consumers to landing pages. CPA campaigns de-risk advertising spend, because advertisers define and pay for precisely what they want.
Why Should An Advertiser Choose CPA Over CPM Advertising Campaigns?
The success of CPA campaigns, like all performance advertising, is verifiable, with advertising ROI easily determined. By definition, CPA advertising campaigns create a linear connection between advertising spend and advertising results. Therefore, CPA campaigns de-risk advertising spend and make it easy to know what advertising is working and the return on ad spend.
Impression-based campaigns, or CPM campaigns, can be leveraged well in coordination with CPA campaigns. Especially for advertisers trying to build brand awareness, CPM campaigns can provide a lift that supports end-of-funnel advertising strategies. However, over-investing in CPM campaigns leaves advertisers exposed to media waste and measurement errors that can eat up an advertising budget without always delivering results.
The top-of-funnel, brand-building power that CPM campaigns offer has its place in most advertising strategies, and finding the right alchemy between CPM and CPA investments is unique to every advertiser. Ultimately though, the ROI, easy-to-deploy, measurable, reliable role that CPA advertising offers advertisers should always be a major factor in any advertising campaign.
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Digital Media Solutions® (DMS) is the leading global adtech company leveraging innovative, performance-driven brand and marketplace solutions to connect consumers and advertisers. DMS helps brands flourish by capitalizing on consumer intent and engagement, deploying sophisticated adtech with big data intelligence to connect brands with consumers at the moments they’re most ready to take action, using messages proven to resonate.