We don’t usually suggest CPA Advertising for a budding publisher, but it’s certainly a profitable model for some legacy publishers with substantial traffic and subscribers. And while we prefer subscription business models because they offer you the most control over your revenue, we can’t ignore that CPA advertising is a big revenue stream for some publishers.
The first rule of choosing a business model that’s ad-driven is being sure that you can make more money from advertisers than from your own products. Clay Hall once said to me that the great thing about having your own products is knowing what your ad space is worth. Because why would you let an advertiser buy a space on your site for $12 per M when you can make $15-$20 selling space to yourself?
Ad-driven websites generate value from users and sponsors. Consumer-focused websites ask users to pay—not with money, but with time and information. They spend time viewing web pages, emails and RSS feeds, thus creating advertising inventory that can be used to sell the publisher’s products (internal advertising) and/or sold to third party sponsors (external advertising) on a CPM, CPC or CPA basis.
There are five unique ways a publisher makes money through online advertising, although they’re sometimes mixed and matched.
- CPM (cost per thousand) – Based on the number of page views an ad receives
- CPC (cost per click) – Based on how many clicks an ad receives
- CPA (cost per action) – Based on how many sales or leads an ad generates
- DIR (directory) – Based on the sale of a directory listing
- SEA (sponsorships) – Based on selling dedicated ad packages to entire sections of your website
Today we’re going to focus on CPA advertising, that is, Cost Per Action, or what a retailer is willing to pay you per action, sale, or lead.
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The Benefits of CPA Advertising
Many publishers are supported by a variety of advertising, licensing, and sponsorship opportunities.
Here are the five ways to monetize your advertising inventory that don’t involve selling your own product. These multiplatform sponsorship advertising platforms include: CPA, CPC, CPM, Directory and SEA.
As you can see from the chart above, which compares the five different advertising strategies we outlined previously, CPA advertising is easy to measure, easy to align with the content you’re publishing and cheap to implement (free, actually), but requires a high volume of traffic to generate significant revenue.
Implementing CPA advertising is as simple as partnering with CPA partners like Amazon, or CPA networks like ClickBank or ShareaSale. When you decide to generate revenue with CPA affiliate advertising, you have control over the ad’s effectiveness. Most advertisers provide an inventory of ad options that you can choose to place wherever you want on your website.
Have any stories to share about CPA advertising? Let’s chat in the comments.
Jane Zarem contributed to this article. It was originally published in 2013 and is regularly updated.
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Very informative and useful article.
Keep spreading your useful knowledge with us.
I might argue that the IMDB/Amazon relationship isn’t quite CPA, in that it’s the same owner. Perhaps technically it is CPA in they have separate P&Ls.
Similarly, if we at Forester Network cross promote our Webinars and publications (which operate under separate P&L’s) those wouldn’t be CPA offers. However, if we did book reviews of books published by those outside of Forester Press, we could use an Amazon affiliate list, and those would be CPA offers.
Thanks for the info.
While many publishers are seeing online ad-based models as a race to the bottom, that’s because too many are leaning on CPM and CPC. While CPA is working well for IMDB, we are finding the SEA (sponsorship) model to be the rising star.