Marketing Glossary

Cost Per Action Advertising (CPA)

What is CPA?

CPA or Cost Per Action Advertising is an online advertising pricing model that makes sure that the buyer of the advertising (the advertiser) pays for the ad only when the desired action is performed (For example a conversion).

Sites offer a way for companies to place ads in front of potential customers in the hopes that they click on them. If you don’t click, the person who placed it there has to pay nothing. But if you do, advertisers must pay up according to industry standards. This is CPA.

The action is where you go with your click. This could be a sale, form completion or contact request. Consider the rate of success for each website and decide how much you like it if they have different rates.

Methods for tracking CPA are typically either through cookies, which is where a small piece of code is left on the user’s browser and then accessed later.

Sometimes companies switch phone numbers to a new branding in order to update their marketing strategies.

Companies rely on automation, like phone calls and text messages, sometimes as a way to reach customers. These have been known to last for a few minutes with companies using them as an advertising technique.

A more popular method though are the ones that work in tandem with coupons and promotional campaigns which can be seen at the checkout by entering codes into the store’s system.

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