Cost-per-action (CPA) advertising, a category of digital performance advertising, de-risks media spend because advertisers only pay when a measurable action is taken. Read on to learn more about CPA advertising and how it differs from and works well in coordination with CPM advertising.
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. And, advertisers only pay for that action, regardless of how much effort or media expense it requires to create the action.
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 immediate 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?
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 cost-per-thousand (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 and easy-to-deploy, measurable, reliable role that CPA advertising offers should always be a major factor in any advertising campaign.
Contact DMS to learn more about the benefits of including CPA advertising within a holistic customer acquisition strategy.
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