Selling your products online means you have a global audience. You can send your product anywhere in the world. But selling online isn’t easy. You need strategies to target customers and get your products in front of users with the money to spend on your product. That’s where CPA affiliate marketing comes in.
It’s a cost-per-acquisition model of affiliate marketing that companies of all sizes use to maximize their reach and scale their marketing strategy. CPA affiliate marketing involves working with a blogger, influencer, or website who will promote your product, including PLR products you might be reselling. They’ll receive a commission fee when a user purchases a product through their link. Affiliates can advertise on websites or promote on social media.
Every brand and influencer should be utilizing CPA marketing to maximize their revenue generation and scale their business. We’re looking at CPA affiliate marketing from both the point of view of businesses and affiliates. Smart-thinking entrepreneurs can do both.
How Does CPA Affiliate Marketing Work?
The CPA model involves three distinctive parts:
- Affiliate: The influencer, publication, or blogger who will promote the product and drive traffic/sales to the website. They’ll earn a commission on products sold through their link.
- Business: The company selling the product or service. They partner with an affiliate to drive sales, generate leads, and build brand awareness.
- CPA Network: A marketing platform that connects suitable affiliates with businesses in their niche or market segment.
Understanding CPA Affiliate Marketing Terminology
Before we dive into this guide on everything you need to know about CPA affiliate marketing, it’s important to get a grasp on the terminology. If you’re new to affiliate marketing or digital advertising, you might not be familiar with these terms.
- Above the fold: content and advertising that appears at the top of a website, making it visible without a user needing to scroll. Above-the-fold advertising is the most impactful and, therefore, the most expensive.
- Affiliate Agreement: the contract between the affiliate and business, setting out the commission rate the affiliate will receive. This rate is usually a fixed percentage of the final sale price.
- Chargeback: If a buyer returns a product purchased through an affiliate link, the commission earned is deduced.
- Commission: The rate or percentage of the sale price the affiliate earns when a user converts through their link.
- Cookies: How advertisers monitor the usage of affiliate links and can link transactions to visitors who have entered the website through an affiliate link.
- Cost Per Action (CPA): the cost of advertising divided by the total number of actions taken by users. If a business spends $100 on a campaign with 10 actions, the CPA is $10.
- Cost Per Lead (CPL): typically used for service-based businesses. It is the same as CPA but focuses on the money required to generate a new prospective customer.
- Earnings Per Click (EPC): the average amount of money earned when a user clicks an affiliate link. Affiliates can calculate this by dividing their total earnings by the number of clicks over the same period.
An Advertiser’s POV on CPA Affiliate Marketing
If you’re a business selling a product or service, you’re an ‘advertiser’. You want to create a CPA affiliate marketing campaign that targets your ideal customer. You may offer a discount code to help affiliates promote your product, or you can develop a landing page to direct links to.
A landing page is ideal for companies selling services or digital products like courses, eBooks, and webinars. Your website cookies will track the user’s behavior while they’re exploring your website through the affiliate link. Monitor your analytics to see what works and which products may need extra marketing.
An Affiliate’s POV on CPA Affiliate Marketing
If you’re an influencer, blogger, or own a digital media company, you’re an ‘affiliate’. Most influencers work with an affiliate marketing network or program. It allows you to easily search for companies within your niche with products and services relevant to your audience.
Avoid choosing products that don’t align with your content. You’ll get a higher EPC by spotlighting products your audience is likely to purchase.
Affiliates get paid after the conversion has occurred through their link. CPA affiliate marketing payments can work differently, but there’s more on this below. Watch out for chargebacks. These occur when the user returns their product or gets a refund. You’ll be charged back for the commission earned during that transaction.
What are CPA Networks?
A CPA network is what connects affiliates with businesses that want to use affiliate marketing to drive sales for their product or services. Influencers, bloggers, and digital media companies can work with CPA networks to generate a side hustle or even earn thousands of dollars every month.
Popular CPA networks offer different pay rates and features. We recommend businesses and affiliates do their research and choose the CPA network that best suits their needs. Some CPA networks offer additional support with affiliate managers, ideal for influencers with a larger reach.
The most popular CPA networks include:
How Much Money Can You Make with CPA Affiliate Marketing?
The sky’s the limit. While not everyone will make a six-figure salary with affiliate marketing, anyone can make it a lucrative side hustle. Most beginners will earn a small amount, but it’s valuable disposable income. How much you earn will depend on your reach and website traffic.
More experienced affiliate marketers with more traffic can earn far more than the average salary. Unlike a traditional job, there are no salary limits with affiliate marketing.
You can earn anywhere from $1000 to $10,000 a month through CPA affiliate marketing. The most experienced affiliates, known as ‘super affiliates’, can even earn six figures a month. It’s typically digital media companies and influencers with highly engaged communities of thousands of followers who can earn this much.
How CPA Affiliate Marketing Payments Work
There are three common payment systems used for CPA Marketing.
- Pay Per Action
The influencer or publisher earns a commission when a user takes a specific action after using their affiliate link. These actions can include signing up for free trials and subscribing to apps.
- Pay Per Sale
The company will pay the affiliate a percentage of the final sale price when a customer makes their purchase using their affiliate link. Affiliates will only earn a commission when a sale is made. Chargebacks can occur if the customer returns the product or receives a refund.
- Recurring Payments
This model is relatively rare as most affiliate programs work on a one-time commission. However, recurring affiliate models allow the affiliate to earn money every time the customer makes a future purchase.
What makes CPA affiliate marketing different from CPC marketing is that you only pay after the sale has been made. You can spend hundreds of dollars on cost-per-click (CPC) advertising without earning a dollar in sales. If a customer returns their order afterward, you can charge back the commission fee through the CPA Network.
It’s worth noting that this structure means the risk sits with the affiliate and not the business itself. CPA marketing is effective as the affiliate is the one who does the advertising and content creation to drive traffic to earn their commission.
Why You Should Use CPA Marketing
CPA marketing works for both affiliates and businesses hoping to drive sales without spending thousands on advertising. It’s affordable for companies of every size and gives them access to new audiences while ensuring they can maximize return on ad spend (ROAS).
Here are the four main benefits of affiliate marketing:
- High ROI
CPA marketing has one of the highest ROIs as payment is only made after the sale is conducted, ensuring that the company earns revenue. Some CPA platforms will offer a flat rate for commission, and others will have a set percentage of the sale price.
- Easy to Use
You don’t have to be a tech expert to navigate affiliate marketing. CPA marketing is relatively easy to set up, with CPA networks doing most of the work. There are relatively low up-front costs involved. You can scale your CPA marketing as your company grows by working with an affiliate manager and automating payments.
- Low Risk
CPA marketing is low risk for companies, especially at the beginning of their growth. You won’t be throwing hundreds of dollars down the drain on advertising campaigns that aren’t guaranteed to drive sales.
You’ll pay after the sale is made, rather than before. Affiliate marketing helps drive website traffic and expand your customer reach.
- Trust-worthy Advertising
Influencer marketing in the United States is expected to be valued at $24 billion by the end of 2024. The potential for CPA marketing comes from the relationship influencers and publications have with their audiences. It’s a trust-based relationship where audiences are more likely to take a recommendation from an influencer than traditional media or believe a paid ad.
Sourcing Traffic for Affiliate Marketing
High-performing traffic is the backbone of affiliate marketing. Both affiliates and businesses want high-quality traffic to generate more sales with higher order values. Affiliates want to prioritize traffic sourcing to maximize income opportunities.
There are different traffic sources and strategies you can choose from. These will vary depending on the type of platform you have and how you can target your audience.
Traffic sourcing for affiliate marketing includes:
- Contextual advertising
- Email marketing
- Organic traffic
- Social media advertising
- Pay-per-click (PPC) advertising
- Native advertising
- Social media platforms
Before you start working on traffic sourcing, you need to double-check the terms and conditions of your CPA network. Not every traffic source is universally accepted.
How Your Business Can Use CPA Marketing to Drive Sales
This section is for you if you’re an online business looking to leverage CPA marketing to generate sales. There are four advantages your company can benefit from when working with affiliates as part of CPA marketing.
- Increase in targeted traffic
Affiliate marketing brings your audience to your website. It also helps boost your targeted traffic with users who can have meaningful engagement with your content. Once users get onto your website through the affiliate link, you want to have the right design, CTAs, and navigation to keep them on your website.
If you do affiliate marketing right, you can turn these new customers into returning clients with high order values.
- Higher sales, lower cost
CPA affiliate marketing allows you to generate more sales at a lower cost. It can be a game-changer for smaller companies and start-ups looking for the most cost-effective way to market their products. You don’t have to pay affiliates anything until they start generating sales.
- Develop long-term partnerships
The relationships you build with affiliates can be crucial to the success of your online business and unlock your potential. It’s a win-win partnership as you both continue to generate revenue from the other one being successful.
Affiliates want to work with high-paying CPA advertisers and these companies need high-performing affiliates. If you find a high-earning partnership that works, take the time to cultivate this relationship. Consider hiring an affiliate manager as your company grows to nurture and develop these partners.
Morphe was one of the first makeup brands to lean heavily into CPA marketing. The long-term partnerships they developed with beauty influencers early in their career resulted in the brand collaborating on sell-out collections.
- Build brand awareness
Even if a user doesn’t shop through an affiliate link, the content your affiliate produces helps to build brand awareness and increase your reach. CPA marketing is an alternative to pad advertising, and the content created will continue to drive traffic long after the initial upload.
Get Started with CPA Affiliate Marketing
CPA marketing in an affordable way to boost sales and drive traffic with a high ROI. It’s suitable for businesses of every size and works particularly well for niche audiences. Whether you’re an influencer or a business, you can take the first steps to start affiliate marketing by joining a CPA network today.
