CPA - what is it and how do you count it?

Internet marketing and running advertising campaigns involves knowledge of specific tools and concepts. One of the most important is CPA, or cost per action, or simply payment per action. It is a specific payment model for Advertisement on the web. What is it and how do you calculate it? We explain!

What is CPA?

The above explanation may not seem sufficient, especially for those new to digital marketing. Every company pays to display advertisements on various websites, social networks or on a search engine results page.

Typically, settlement is based on one of the following indicators:

• CPC (pay per click advertising);
• CPE (cost of interaction);
• CPM (charge per 1,000 ad impressions);
• CPV (fee per display);
• CPS (fee per sale);
• CPA (charge per action).

The choice of a particular model largely depends on the expected results. It can also be adjusted according to audience categories. We will, however, look at the last on the list - CPA.

For a better understanding, it would be necessary to explain in more detail what CPA is and what CPA advertising is. We already know that it is a model for measuring and pricing online advertising. It is also an important advertising campaign performance indicator . It shows the cost it will take to perform a specific action (conversion) on a website.

Activities billed under the CPA model are, for example:

• completing the contact form,
• zapis na newsletter,
• sending an enquiry or completing a survey,
• downloading the e-book,
• service registration.

How does the CPA count?

The cost of acquiring a CPA is an important issue. How is it calculated? Simply divide the total cost of the advertising campaign by the number of conversions . Note that you only pay for clicks, completed forms, purchases or registrations.

The resulting figure is the cost incurred for driving a particular action. Let's assume that you have an online advertising campaign for your new product, on which £5,000 went. If 185 people bought the article, the CPA cost would be PLN 27.02. CPA marketing is, in other words, a financial indicator that helps to determine the impact of the marketing campaign on revenue .

Advantages of CPA - how to plan advertising costs?

The advertiser can easily plan the budget. By determining your target CPA rate (average amount per conversion), you can avoid unprofitable clicks and thus achieve a higher conversion rate at a lower cost. A target CPA simulator will certainly prove helpful.

This solution automatically selects the optimum cost per click for an ad if it is eligible for display. At the same time, it sets higher rates for valuable clicks and lower rates for less valuable clicks. This avoids accidental actions by undecideds or even fraudsters.

The customer lifetime value (CLV) parameter is used to measure the value of a given customer. This involves calculating the revenue each customer brings in.

Cost per action, i.e. measurable effects and better budget planning

In the CPA model, attention is paid to the cost of acquiring a specific customer action. Therefore, advertisers inserting an ad, for example, on a particular page, pay for a positive result. The target CPA allows you to accurately plan the budget needed for an advertising campaign . It also provides a kind of safeguard against unnecessary expenditure. This indicator also provides tangible evidence of the effects of the campaign (e.g. e-books downloaded, forms filled in).

It is important to note that there is an important difference between CPA and CPC (cost per click). In the latter case, you pay for the click of the ad itself. However, not every click will cause the customer to perform the desired action. Billing on a per-click basis can also fall prey to malware. There are often questions about rates per action. These are usually higher than rates in the CPC model.

How do you promote your business with InPost?

At InPost, we offer marketing campaigns to business customers. Our services include both online and outdoor advertising activities . Billing methods depend on the type of advertising chosen.

One of the proposals is a banner campaign on our website or mobile app so that your advertisement can be placed in the location of your choice.

In addition, we can send your advertisement as part of our newsletters . There will be space for graphics and text to showcase a brand, service or new product. We have one of the most popular mobile applications in the country. We offer our customers the option sending marketing PUSH notifications to users.

In addition, you can to tape the Parcel Machines with their advertisements . We are involved in the production of veneers, installation and removal. It is worth combining this form of promotion with sampling of products in boxes and displayed graphics on vending machine screens .

If you are interested in any of our proposals and would like to know more about payment and operating rules, please write to us via the contact form.