Definition - What does Cost Per Action (CPA) mean?
Cost per action (CPA) is an online advertising marketing strategy that allows an advertiser to pay for a specified action from a prospective customer. Doing a CPA campaign is relatively low risk for the advertiser, as payment only has to be made when a specific action takes place. CPA offers are most commonly associted with affiliate marketing.
Cost per action is also known as cost per acquisition (CPA).
In the CPA model, the publisher takes the maximum risk as income is dependent on good conversion rates. Because of this, selling on a CPA basis is not as desireable as selling ads on a CPM (cost per impression) basis. Some publishers who have surplus inventory will often fill it with CPA ads.
The effectiveness of advertising inventory purchased by an advertiser can be measured using effective cost per action or eCPA. The eCPA indicates the exact amount the advertiser would have paid if it had purchased the inventory on a cost per action basis.
Sometimes CPA is referred to as "cost per acquisition," as the majority of actions are sales. In other words, the advertiser has acquired a new customer. Technically speaking, a CPA deal could include any action, not just a customer acquisition or sale, but in practice CPA means sale. When the action is a click, the sales method is referred to as CPC, and when the action is a lead, the sales method is referred to as CPL.