Cost Per Click and Cost Per Action Explained
Differences Between CPC & CPA, How Do You Choose What Works Best for You?
CPC and CPA have commonly used acronyms standing for Cost Per Click and Cost Per Action, respectively. They are key terminologies used in affiliate marketing and paid online advertising. Companies looking to market their services through Google, Facebook, and other high-traffic websites often find it challenging to choose between these two models due to similar goals. If you are in the same fold, the guide below outlines key differences between CPC and CPA. Determine what works best for your company when choosing between the two in Performance Marketing.
CPA is an excellent option if you are looking to invest in ads that drive potential customer action. Also known as Pay-Per-Performance, advertisers pay once an action has been taken from their ads. In this situation, the advertiser only pays if a user clicks on the ad and completes an action, such as making a purchase, filling out a form or answering questions.
The action taken from the ad depends on the advertiser, which varies from signing up for email lists, watching a video, making inquiries, and any other specified action. Once an action is taken, the advertiser is then billed consequently. The only limitation with this model is that Google requires advertisers to have a minimum of 15 conversions monthly to allow a CPA campaign.
Additionally, to achieve an effective ROI with CPA campaigns, the advertising campaign should be optimized to have effective click-through-rates, excellent keyword quality, and conversion rates.
As mentioned, CPC stands for Cost Per Click, which describes the rate at which advertisers pay websites for their ads. For instance, if a website charges $10 per click to advertise and your advert is clicked 50 times per day, you will part with $500 for the ad.
Google is a well-established Cost-Per-Click ad website with millions of Google Ads available on its search engine results. However, Google will only charge the advertisers if a person clicks on the ad. If there is no click on the ad, Google won’t charge anything to the advertiser.
If you choose to use the CPC advertising method, you won’t pay the same amount for each click. What you will pay hugely depends on various factors, such as the competitive nature of the keywords. For instance, if your ad appears on differently competitive keywords, you will pay more for a more coveted keyword and less for an unpopular keyword, majorly long-tail keywords.
CPC or CPA? Which is the Best?
Like any other digital marketing strategy, choosing between CPC and CPA depends on your advertising campaign’s nature. While both CPC and CPA have their advantages and disadvantages, they can be effective if used accordingly. However, on the contrary, they can also have detrimental effects on your advertising campaign if not appropriately handled.
Advertisers with high quality and PPC driven channels should consider using CPA campaigns. While they might pay more for every click due to their keyword quality and get comparably few clicks compared to running CPC campaigns, they will record more leads generated and more revenue.
On the contrary, marketers looking for consistent exposure should consider optimizing their PPC profiles for CPC. CPC is also an excellent choice for advertisers with daily marketing budgets looking for maximum traffic. If you are thinking about running both campaigns together, consider the nature and stage of your advertising campaign and what you want done on your website. Both strategies can work for an establishing PPC campaign looking to popularize and get actions.
Running A Performance Campaign
Understanding your goals are important when you are determining your digital marketing strategy. By working with Visiqua, we consider all of your efforts and create custom campaigns per client. Whether is it CPA, CPC or a combination of both – we are determined to bring you quality leads within your budget. By working with Visiqua, we are able to deliver a vast publisher base that are within your vertical as well as access to our click exchange, Clicks to Convert.
Clicks to Convert places your ads on website that match your brand. We also offer the ability to display custom creatives while having access to a transparent marketplace. Pay for high intent clicks with targeting tools and right price bidding. Learn how your brand can start a performance campaign with Visiqua & Clicks to Convert.