Are you confused between CPC and CPA? Are you unable to decide which parameters are crucial to decide RoI of your ad campaign? Do you want to know how CPC and CPA impact your campaigns in the long run? Then, this particular article is a must-read for you!
What is CPC?
CPC means Cost Per Click, which is also known as PPC – Pay Per Click. This one is quite simple and self-explanatory. Online advertisers pay whenever, and only if their online ads get clicked by the visitors.
What is CPA?
CPA means Cost Per Action is also known as Cost Per Acquisition. In the CPA model, online advertisers pay only if any particular conversion-– depends upon your goals-– happens. It means that the advertisers have to set some kind of goal, which they will interpret as a conversion before starting any ad campaign based on this pricing model. This goal can be to buy, register, or even reach the desired section of your website. Each time a user achieves that particular, the advertiser pays the agreed price. Obviously, this type of model is devoured by most of the advertisers, but it is not very popular among the publishers.
So, which is the best among the two?
The internet advertising pricing models: cost per action (CPA) or cost per click (CPC) is always confusing for most people. For example, we have media owners, most of whom prefer to charge their advertisers either by CPM (it is the additional acronym of the word) or by CPC. After all, it gives them a greater guarantee of their payment. On the other hand, we have the advertiser and most of the advertisers prefer to pay only when the desired action occurs, that is, based on CPA.
As a salesperson representing an owner of pay-per-click means, I feel I have one foot in each of these corners. As an advertiser, I understand the attractiveness of paying only for the media space that a new customer gives MIVA. As a CPC media owner, I understand what items are under my control. I can control the clicks and my intention is for those clicks to become actions. However, if that is the case, it also depends on the website of the advertiser: if your credit card does not work or if your website is poorly designed, is it my responsibility?
It is time for us to change the conversation. The “o” must be replaced with a “and”. Ultimately, it doesn’t matter what pricing model is used; Advertisers always tend to return to work at a CPA. If you get a great return on your advertising investment with a purchase per click, you will be willing to buy more and maybe even pay more.
An interesting company to look at in the CPA and CPC conversation is Snap.com. This IdeaLab search engine was created by Bill Gross, the gentleman who started GoTo.com (the previous name of Overture, which is the previous name of Yahoo! Search Marketing).
With the help of Snap, advertisers can easily decide how to pay: by CPC; fixed cost per share (FCPA): where advertisers choose a fixed amount and pay only when a consumer completes a specific established action, or variable cost per share (VCPA), where advertisers choose a fixed percentage of purchase price and pay only when the item is sold. Snap’s minimum FCPA is $ 1 per share, and its minimum VCPA is five percent per sale.
The pricing structure of Snap highlights an interesting comparison: the minimum rate of CPC on many engines (including MIVA) is five cents. The CPA of some companies may be less than one dollar. Are they out of the CPA game for a minimum price? And what about content-based websites that seek to increase the audience to increase print levels for their own advertising sales efforts?
Let’s see the prices first. CPC pricing allows companies of all sizes, with large and small budgets, to benefit from profitable and results-oriented online advertising. With a low minimum price, advertisers who use CPC engines tend to be able to bid on both specific keywords and generic terms.
These specific terms are called keyword long tail or long tail of the search terms curve. They are the keyword chain “cheap flights to Morocco at Christmas” which, due to a lower volume and, often, a lower competition, has a lower CPC price than the keyword “flight”, which is more generic and expensive.
The CPC also tends to work well on a wide range of marketing goals, as it can provide a great online exposure: increase sales, generate an audience, and increase new registrations. So does the CPA. But, if your main focus is to attract an audience, CPC ad purchases would seem to be one of the best routes to follow. With CPA prices, the use of promotions and incentives, such as “buy one, get one free” becomes increasingly important to boost acceptance. The promotions also work great for CPC but they are not so crucial.
In today’s online world, pay-per-click engines, also known as search marketing programs, use CPC pricing more commonly. CPA prices are mainly used by affiliated networks. Typically, both appear in the media plans of the advertisers. That’s right. It is important to know the benefits of both pricing models, but ultimately, it can be suggested that if they are kept on a media schedule it is determined by that acronym that we all love most: RoI. If you need any assistance, you contact a reputed digital marketing agency in India that can assist more on these technical terms so that you can improve your RoI.