If Cost Per Action Marketing Is So Easy, Why Is Everyone Not Doing It?

Cost per action marketing, or CPA marketing, seems so appealing at first. It says that instead of paying every time someone clicks on my advertisement, I only have to pay if they actually buy what I am selling.

There is a range of variables for cost per action marketing and different websites might have different rules, such as paying when a purchase is made and when an impression is made, or similar goals are reached.

Each website and advertiser can determine these variables before a campaign is placed and in this way, reach an agreement that everyone is happy with.

The Benefits of Cost Per Action Marketing

For small businesses, cost per action marketing can be great form of promoting products or services. Small businesses or new, start-up businesses might not have the budget to spend a ton of money on advertising. As they are trying to build up a clientele, they probably must accommodate for a lot of different advertisements in various places.

With CPA marketing, these businesses can ensure that they are not putting more money out than they are getting back and that they will not come up empty-handed from all of their advertising efforts. It is also a good way for them to test the waters and see in which places their advertisements were the most efficient, so they know where to continue and where to pull the plug without losing any money in the process.

The Downside to Cost Per Action Marketing?

One major problem that has been noted in CPA marketing is “lead shaving,” or, when the company that you are advertising with does not fully provide the list of leads that you rightfully got. Unfortunately, some networks do this unintentionally, while others might not even realize that this problem is occurring.

It is simply a glitch in the system that if the website is taking ten percent from you, than every tenth lead that you generate will not be accounted for on your list of leads, causing you to lose out on some potentially great opportunities.

Another con of cost per action marketing is that it is not easy to be accepted into a CPA directory and at the same time, Google has been cracking down on CPA offers, so the field is becoming smaller and smaller. For newcomers, it can take a long time to be accepted and the time spent waiting is also valuable time lost when you could be advertising elsewhere.

Additionally, if your ad does not generate money for your host, you can be almost guaranteed that they will not have the patience to wait to see some profits. They will generally have no problem kicking you out and selling your spot to their next willing customer.

Cost per action marketing may be easy but may not necessary be the perfect solution for everyone due to the different stipulations made when signing up. It might not actually be the lose-free way to go.

While in some cases, payment is only made when a customer has made a purchase, in other cases it could be for something as simple as filling out a form on your website or entering a zip code. If you are paying for all of these insignificant actions and still seeing no sales, then your ad has done no better than pay-per-click sites.