Online business, especially e-shopping, has seen a massive explosion during the last few years. The U.S. e-commerce market was estimated to be worth $517 Billion in 2018. With the enormous influx of startups and traditional businesses adopting digital pathways, competition is extremely intense.
The marketing strategy needs to be a strong pillar to support your online business. Online/digital advertisements are the most lucrative way to attract consumers, generate demand, and facilitate sales.
The traditional form of online advertising is based on cost-per-impression. Businesses register on platforms like Google and Facebook and pay a fee. This CPI fee (known as cost per thousand impressions) is the amount charged by these platforms to display a thousand instances of the advertisement.
Irrespective of how the user interacted with the ad, this fee needs to be paid. If the conversion rate (landing to the intended webpage or making a purchase) is less, the return on investment takes a hit. This is where the CPA comes into the picture.
CPA marketing, also known as cost-per-action marketing is a commission-based model where a pre-negotiated commission is paid to the platform only when there has been a concrete action. An action could be a user clicking the advertisement or going to the webpage of the business and making a purchase.
This paradigm is based on real business results rather than the level of exposure. The ROI offered is undoubtedly better than the CPI model.
CPA Marketing Basics
CPA marketing is a tweaked form of affiliate marketing. Ecommerce businesses may create offers and online marketing campaigns. An affiliate may register for the program and advertise the business’ offerings on their own blog, website, social media, etc.
Any action (click, watching videos, filling surveys, etc.) which is completed through the affiliate’s link, makes them eligible for a commission as per the negotiated rates.
Let’s understand who’s who of this model:
- Business (or advertiser): Owns and runs the affiliate program to promote products.
- Publisher (or affiliate): Uses his own network to increase traffic for the business.
- Network: This facilitates the entire CPA marketing process where affiliates communicate with the business, manage earnings, etc.
Affiliates are issued links containing an exclusive tracking code for the company to identify the source where the action came from.
Higher traffic is the first indicator of a well-performing affiliate network. That said, you must place your content where it is relevant. A blog for car maintenance and spare parts may advertise for garages or battery replacement businesses. There is little sense in promoting a mobile phone on this page.
It is a two-way street. Affiliates partnering with businesses that are aligned to each other’s interests are significantly more like to generate quality leads. This leads to better conversion and is a win-win situation.
- Affiliate Network tie-up:
Using a top-notch affiliate partner is bound to give your business the much-needed boost. Reputed affiliate programs like Amazon Associates, Shopify, ShareASale, and Rakuten lead this market and are known for delivering.
- Commission Structure:
Ecommerce businesses should crunch their data and analyze which of their products need a boost. The identified products can have a higher commission structure to make the program more lucrative.
Affiliates, especially new ones, shouldn’t blindly run after the product offering maximum commission. Leverage your strengths and the needs of your followers. If you own a fashion blog, try promoting beauty products, accessories, watches, etc. Trying to promote a laptop here will hardly help anyone. On the contrary, out of place content makes a page lose its relevance.
Consumer behavior is not predictable and standard. Affiliates may try using a combination of different images, text, color, and ad-size. A correctly placed advertisement will gather much more attention.
Users often bounce off blogs before reading the article thoroughly. It is recommended not to place the ad at the bottom of the page. Use the area around the left and right margins. Continuous visibility drives curiosity.
Businesses can try tweaking their commission rates by announcing short term bonus commission or other perks.
- Native Advertising
Make efforts to match the theme and tone of your website to that of the advertisement. Glaring advertisements may not be a very sensible choice.
- Data Analytics
Get your pages connected to an analytics service. Gather data and about clicks, demographics, bounce rates, and other performance indicators. Use this data to strategize and optimize your campaign.
Well promoted products may lead to a steady revenue stream for businesses. However, reducing the commission on such products could be counter-intuitive. These products are cash-cows for both businesses and affiliates. Reducing commission would cause the affiliate’s earnings to take a hit, and the member may start losing interest in your program.
- The power of Authority
Quality tie-ups can prove to be a bonanza. If a website is an authority on the genre of products you are selling, a review from them could be valuable.
For example, if you’re selling protein supplements, sending some free samples to that gym-review website may lead to a lot of gains at a fraction of the advertising costs. It is also a co-branding of sorts.
If a popular product seller and trusted reviewer collaborate, the product’s description can mention the reviewer’s comments to serve as unbiased verification of the product’s quality. This description, in turn, will lead customers to the reviewer’s website to gather more knowledge. It’s a symbiotic relationship.
- Adopt Simplicity and Avoid Negativity
The sign-up process for many websites is straightforward. Few clicks, and it is done. On the other hand, some sites require credit card details, bank details, and address immediately.
Potential affiliates are more likely to shy away from networks requiring a lot of data upfront. No one would want complexity in signing up when all they have in mind is how to promote products.
Choose an affiliate network that has convenient onboarding, money withdrawal, customer service, and dispute resolution processes. This will guarantee you a more comprehensive and high-quality affiliate network.
- Have Balance
Choosing a top-of-the-list affiliate network may provide the best features for you and your affiliates, but this commands a premium.
Choosing a cost-effective affiliate partner can reduce costs significantly. Keep some of the savings with you and pass on the remaining benefits of the affiliate. Surely, s/he won’t complain if your affiliate partner takes an additional 48 hours to release the payment.
- Affiliate Manager
Earning money through CPA marketing requires a lot of effort to optimize the campaign, add new products, prevent misuse, remove money-guzzlers, etc. Cost-per-action marketing is a dynamic system, just like all other forms of marketing. Hire a manager to take care of your CPA marketing campaign to reap the maximum benefits.
Advertise your way to success!
Author’s Bio: Aditya works as a Growth Assistant at AirTract.Com, a social platform wherein people ask questions, get expert video consultation, share knowledge and experience. He has a Bachelor’s Degree in Computer Science Engineering and has been working in the field of Digital Marketing for the past two years. He is also a voracious reader and a big sports fan.