CPA networks, like affiliate networks, recruit affiliates by offering comprehensive access to merchants and other services. These affiliates, or publishers, provide lead generation of prospective customers for the online merchants, and in exchange are compensated through a cost per action commission that varies depending on the value of the transaction. The lines of communication and means of recompense for the publisher’s lead generation are routed through the CPA network, for simplicity and efficiency. The CPA network may receive a portion of the commission the publisher earns for the lead generation, in which case the CPA network is also compensated on a cost per action basis, or they may collect a fee from the merchant in exchange for access to the CPA network’s large quantity of affiliate partners.
CPA networks that tap into lead generation do so for merchants that cannot rely on repeat business. They require lead generation to find a constant stream of new customers, and pay a cost per action commission relative to the value of the lead. This allows CPA networks to prioritize their lead generation efforts.
For example, an online mortgage broker requires a steady influx of new customers, since buying houses is not a frequent purchase for most people. A CPA network may specialize in a specific market, or they may find the most valuable real estate market and concentrate their lead generation efforts on that, since it will earn a higher commission. Other areas of online business that require lead generation include higher education, debt financing, and auto sales.
For an online merchant who wants to sell their product or service, a CPA network’s lead generations are an optimum way of doing business. Because the CPA network’s affiliates are selling their services on a cost per action basis, as opposed to cost per click or some other derivative, the merchant receives the most reward for the publisher’s efforts, and the cost per action compensation is commensurate with this reward.
There are a few different ways a CPA network and its associated publishers can achieve their goals. An affiliate can place cost per action ads that drive web traffic to a site with embedded contextual ads. For lead generation purposes, these ads could even contain ways of getting useful information from prospective customers, like being formatted as a questionnaire. A simpler and more direct way for a publisher to earn commission is to place a cost per action ad which drives traffic directly to the merchant. If the customer then makes a purchase, the affiliate earns their commission on that cost per action basis. Doing business this way allows CPA networks and their publishers to proceed directly to sales without the lead generation. Either way, the needs of the merchant will determine the most appropriate advertising methods on the part of the affiliate.
Tags: Affiliate Network, CPA Network