What’s the difference between CPA and CPS?
If you want to become an affiliate marketer and use your website(ADNext Media), blog or external links to promote a partner site and make money online, it is important to learn about the most common and popular affiliate payment models, so that you can make the right decision about which will work the best for you.
Different affiliate schemes – and sometimes, different partners and offers within the same scheme – offer different types of payment models to reward their affiliates and pay their commissions, using a range of standardized systems that each have their respective pros and cons.
Two of the most popular affiliate payment models, and the two that you are most likely to come across when looking at different schemes are the CPS and CPA abbreviations – CPA meaning “cost per action” and CPS meaning “cost per sale” respectively.
In this post, we will provide a full CPA definition and corresponding CPS definition, and explain more about affiliate CPS and CPA in marketing to get you started.
What is CPA?
The definition of CPA is “cost per action,” which means that the CPA is the financial cost to your affiliate partner of a certain agreed action that you achieve. This action is something that will be determined by the affiliate scheme you are working with, and may be a simple click on one of their links, or data capture in the form of an email signup or other specific activity.
Every time you achieve this specified action, you will earn a set amount of commission per CPA click or activity.
CPA internet marketing or cost per action marketing means that you need to fine-tune your affiliate advertising and promotions to try to achieve the maximum number of successful actions on the part of your target audience, in order to maximize your earned commissions.
What is CPS?
The full form of CPS is “cost per sale,”. For your affiliate partners, CPS is the cost to them (in terms of the commissions or payouts that they make to you) for each sale you make on their behalf.
This type of affiliate commission model means that your affiliate partners only make a payment to you when you achieve a successful sale – which is, of course, harder than achieving a non-monetized action from one of your prospects, and so, will usually require a rather different approach.
Commissions for affiliates who use CPS marketing are usually higher than those for CPA payment structures, reflecting the additional work and effort involved in converting a prospect into a sale.
What does CPA mean in affiliate marketing?
To make an informed decision about what type of payment model to look for from an affiliate scheme and determine if CPA is right for you, it is important to make sure that you first understand exactly how affiliate CPS works and vitally, how you can make it work for you.
Designing a CPA marketing plan
How your affiliate scheme pays out your commissions is essential information that you need in order to determine how to plan your marketing endeavors to maximize your income and make the most profit from your efforts.
When designing a CPA marketing plan, it is important to keep the end goal in sight at all times – achieving a predetermined action on the part of your prospects, or the people that you will be targeting with your marketing.
In order to do this, you have to first identify the target demographics that will be interested in what you have to offer and for whom you have ideas on how to convert this interest into actions, and find out where they hang out online, both on the desktop and mobile devices.
Once you have got this far, you can take inspiration and direction from the types of websites, forums, social media platforms and other online portals where your targets congregate and hang out, and emulate successful adverts and approaches on each specific portal to fine-tune and direct your endeavors.
Use the analytics provided by your affiliate partners to monitor your CPA success, and fine-tune your approach to concentrate on highly profitable areas and improve upon campaigns and approaches that are not paying off.
Designing a pay per sale marketing plan
If you decide to join an affiliate scheme and use the CPS or pay per sale payment model, your marketing approach and plan to enact it will by design need to be rather different than if you are working with the CPA model.
Not only do you have to do all of the groundwork in terms of identifying who your target audience are, where they hang out and how to reach them, but you also have to convince them to put their hands in their pockets and actually make a sale or purchase before you can make any money.
CPS online and mobile marketing requires more effort and know-how on the part of the affiliate to achieve a sale, which means that doing plenty of research and writing up a step-by-step plan to follow in order to achieve your goals is a good idea, to provide direction on how to proceed and to maintain your momentum.
Strong calls to action, clickbait, teasers and of course, special offers and promotions can all help to enhance conversions and drive sales, and offering time-limited or one-off offers to mobile users who may only be browsing for a few minutes can help to catalyze impulse purchases for an immediate payoff.
Affiliate CPS marketers often find that signing up with a CPS affiliate scheme and then allocating some of their time and effort to selling to mobile users produces the best overall yield and profit when compared to using the CPA/cost per action commission model, which pays out at a lower rate.