CPA networks: myths and reality
CPA networks have long been proven effective. However, despite thousands of successful cases, some companies in the market still have a biased opinion about the networks’ productivity and offer myths in support of their doubts. We are going to dispel them today.
What is a CPA network?
In fact, it is a place for mutually beneficial cooperation between an advertiser and partner network of web-masters which delivers an offer from a company to the most relevant target audience.
The advertiser pays the network for a particular result, i.e. a user's action, rather than for the clicks and impressions. For example, for a purchase made or a form with contact details sent registration on the website or request for a return call from the resource. That is the actions that meet the goals of an advertising campaign.
It is beneficial for companies, web-masters and partner networks alike to work using the CPA, or cost per action, scheme.
A company chooses a network and thinks over the conditions of cooperation, for instance, how much it is ready to pay for a desired action. CPA network incorporates information from an advertiser into a partner program, attracts webmasters to it who, in their turn, bring clients to the website and receive consideration for each of them.
Partnership network fee depends on the check amount and ranges from 20 to 30% of each lead, request, or purchase, while the rest 70 to 80% goes to the web-master.
Yet, there are some myths that cast doubt on the cooperation with CPA networks.
Myth 1: fraud or poor-quality traffic
This idea was conceived at the outset of CPA networks when the program still had no clear-cut rules for web-masters. Today, large networks have at their disposal whole departments that keep things in order: thoroughly check the partners and provide the advertisers with tools to monitor the quality of traffic.
Web-masters' conversions and complaints about them are thoroughly analyzed. If any violations are revealed, the web-master or resource is excluded from the program.
Additionally, in the CPA network profile, advertisers specify some conditions and rules to be taken into account by webmasters to get paid for the conversion.
An advertiser may also utilize anti-fraud solutions from independent companies specializing on traffic quality monitoring. If fraud is confirmed, a CPA network blocks the web-master and his conversions are not paid for.
Myth 2: cannibalization of own-brand sales due to work in similar niches
To avoid cannibalization of sales, the brand and CPA networks agree at the start of an advertising campaign on the particular niches they will be operating in. For example, the agency takes care of the contextual, banner, and media advertising, while the network focuses on teaser networks and work with applications.
If channel overlapping is levelled off, then cannibalization of brand sales is reduced to zero.
Myth 3: CPA = contextual advertising
Why pay someone for contextual advertising if a digital agency can handle it well? This question is often asked by companies that have a biased attitude towards CPA networks.
Currently, CPA is not just contextual advertising but also a series of additional channels. We will talk about them later. But even if the network was limited to contextual advertising only, its capabilities would reinforce any advertising campaign all the same.
First, not every agency is experienced in working with all goods on the market. Second, it takes time to understand the specifics of a product, select relevant target audience, arrange and optimize a campaign.
Thousands of webmasters registered in CPA networks work with different advertisers at the same time, regularly increasing expertise in product categories.
Third, who said that CPA is a competitor to agencies? Agencies often use networks as an additional channel in the course of advertising campaign optimization. For instance, they distribute contextual advertisements between themselves and CPA, taking on the work with high-conversion brand requests, and giving away category requests to the network.
Myth 4: CPA networks show advertisements to the audience that is not loyal to the brand
This myth is also easy to dispel since CPA networks, having received a detailed brief from an agency, select only those webmasters who focus on the target audience and category to which the brand product/ service belongs.
For example, a web-master with a "seasoned" audience of supermarket bargain hunters will never receive a request from a CPA network to generate test drive orders for luxury cars.
Myth 5: Modern CPA networks use the same set of tools to perform desired actions for advertisers
These days, CPA networks have broadened the list of their web-masters significantly. Advertisers now have an opportunity to utilize cashback services, telegram channels, theme-based and promo code platforms, loyalty programs and other tools.
TELEGRAM CHANNELS AS A TRAFFIC SOURCE. Social media gradually recede into the background, while messengers are taking the lead. For example, Telegram, Viber, WhatsApp. The audience of messengers is generally loyal and aimed at development; therefore, a great many links to announcements, goods, publications and promo codes are successfully integrated into content and yield the result.
PROMO CODE PLATFORMS OR RESOURCES WITH DISCOUNTS undergo a real boom now because the users' purchasing power has declined and people want to make purchases at the most favourable prices.
WORKING WITH LOYALTY PROGRAMS A loyalty program is a sort of fan club of a particular store or service. Users may collect a certain number of points and then exchange them for discounts or valuable gifts. Such brands as UIA, Mastercard, WOG and MyFishka have programs like that.
MAJOR CASHBACK SERVICES such as letyshops.com are in fact separate platforms that regularly carry out additional promotional offers: postal mailing, banners, cashback increase.
This is just a small portion of the resources employed by CPA networks.
What are the conclusions?
Working with CPA, clients get access to a large number of platforms, systems and tools at their option which, if used skillfully, can create additional conversions.
However, there is an important nuance which should also be taken into account by agencies working with a CPA network. Any CPA placements, in terms of ROI, will always be more costly for a brand than direct conversions from the advertising traffic. This is due to the fact that, apart from the costs of promoting the brand, the lead with CPA will additionally include the earnings of a partner, web-masters as well as risk of failure.
A great advantage of CPA networks is that they guarantee sales at a specific cost agreed with the client. A significant disadvantage is that they do not guarantee large sales volumes. Thus, CPA cannot be the only channel in an advertising campaign. Today, this is an excellent additional channel which is capable of providing additional conversions in respect of tools that are not essential for the client/ agency to promote.