What are CPA networks and how to work with them?

CPA networks are one of the tools of promotion and advertising. WEDEX will tell you how to work with CPAs and what risks may be involved.

What are CPA networks?

New online marketing opportunities are constantly emerging, changing, and disappearing. However, there are strategies that, despite their controversy, continue to be popular. One of these strategies is CPA.

CPA in English means «Cost Per Action» or «Cost Per Acquisition», i.e. «price per action». CPA itself is a network marketing model in which the advertiser pays only after the user performs a certain action. The type of user interaction with an advertisement or ad is chosen by the business owner in advance, based on the strategy chosen for promotion. For example, a company desperately needs new leads from the website, so all the actions of CPA specialists will be aimed at activating this area.

In addition, CPA strategies, according to some experts, are ideal for the B2C model, i.e. Business-to-Client, when a business interacts directly with a client, for example:

• direct sales of finished products;
• providing specific services;
• selling custom software;
• etc.

What are the advantages of using affiliate networks?

Affiliate networks offer the following advantages over other promotion methods.

Payment for results

The advertiser pays only for the actual result, i.e. the user performing specific actions stated in the offer. This helps to minimize the cost of ineffective advertising. On the other hand, there is a high risk of getting bots instead of real leads (more on that below).

Predictable ROI and wide audience reach

CPA offers a predictable ROI, i.e., a return on investment. In most cases, all expenses for a CPA network are known in advance – from the required number of leads to the expected involvement of these leads in certain activities.

CPA networks cooperate with thousands of webmasters, which allows them to reach not only a diverse but also a niche-interested audience. Channels of traffic promotion and acquisition can be different: thematic websites, blogs, social networks, email newsletters.

Optimization of the advertising process and format flexibility

The advertiser does not test platforms and promotion strategies on them – this is the task of partners and the CPA network. In some ways, CPA companies are similar to advertising agencies, i.e. clients come with a request and money for promotion, and CPA does the rest of the work.

CPA networks are very flexible due to the large number of niches they are present in, as well as different models of interaction that depend on the goals of the campaign. CPA promotion is available for almost any industry: finance, e-commerce, gaming, infoproducts, etc.

Fast results and sales scaling

As with SEM, CPA networks offer almost instant promotion results. This is because both networks and their partners are interested in results, as financial rewards depend on them.

CPA is also easily scalable – if the company is successful, you can simply connect more webmasters to improve the results. Another important nuance is that the flow of leads and traffic can be increased without directly involving additional staff or resources.

How does a CPA work?

Almost all CPA networks work as follows:

1. Advertisers connect offers to the CPA network, setting a reward for a certain action (for example, $5 for each new lead).
2. A CPA network places offers in its system and gives webmasters access to them.
3. A webmaster (website owner, blogger, SMM specialist) receives an affiliate link and places it in their channels: websites, social networks, contextual advertising, etc.
4. Users surfing the web and thematic sites see ads in the form of banners, search results, contextual ads on social networks, and click on affiliate links.
5. On the website to which the affiliate link directs, the user performs an action (subscribes to a newsletter, leaves a purchase request, etc.). The CPA network records this action by using tracking, such as cookies, pixels, postback links, etc.
6. The webmaster receives a reward for a confirmed action, the CPA network receives a commission, and the advertiser receives a new lead or client.

The main goal of CPA is not just to attract traffic, but to get specific targeted actions from users (leads, subscriptions, purchases, etc.). Advertisers usually work directly with CPA networks, creating offers and defining the terms of cooperation. In some cases, aggregators may be involved to work with several networks.

Types of CPA models

Today, there are several subtypes of CPA interactions offered by CPA networks as the main pricing models.

CPI (Cost Per Install)

CPI – cost per install. The advertiser pays the CPA network for each app installation. This model is specific and used for mobile applications. The webmaster gets paid only when the user installs the app and opens it. The model is widely used across the entire mobile app segment.

CPE (Cost Per Engagement)

CPE – payment for interaction. This model involves rewarding the webmaster after the user performs a specific action in the application or website. For example, watching a video, registering, or completing a level in a game.

CPL (Cost Per Lead)

CPL – payment per lead. Advertisers pay for each new lead from the entire traffic flow. A lead will appear as a result of filling out forms on the website, subscribing to the newsletter, etc.

CPS (Cost Per Sale)

CPS – or pay per sale. This model is used when an advertiser needs a real result, preferably an instant purchase. In the CPS model, the network will receive income only after the user makes a payment.

CPC (Cost Per Click)

CPC is a payment for clicking on links. It is more common in contextual advertising, but it is also used in CPA networks. The most common example is an appeal to click on an advertising banner on a website.

Each of these models is used for specific tasks and works accordingly. If you have a need for new leads, then using CPE instead of CPL will be inappropriate.

Leads and their types in the context of CPA

In addition, to know different models of CPA promotion, you need to clearly understand what it is used for. Usually, most companies are interested in new leads, i.e. future potential customers. These leads are ordinary users who need to be interested in your product or services.

To make this process as natural as possible, a sales funnel is used to engage users in the business in stages. In general, all users can be divided into five types:

• people who are not interested and are not part of the target audience;
• potential customers;
• low-quality leads;
• warm ice;
• client.

The first category, i.e. people who don’t match your business’s target audience, is the majority of Internet users. At the first stage of any service promotion, your task is to separate theoretically interested people from those who don’t need them. This will help you save both time and money on SEO, CPA, or SEM.

Prospects are those who understand and are interested in your niche. You should focus your marketing strategy on them, because it is potential customers who will eventually become full-fledged clients.

Low-quality leads are those users and bots that have left incorrect contact information, such as an email address. Such a lead is unlikely to be identified and will not be able to become a customer in the future.

A warm lead is a user who is one step away from becoming a full-fledged customer of your business. Such a lead has confirmed contact information and is a real person.

How do lead types relate to CPA? The answer is simple: directly. CPA networks should help you generate a stream of genuine leads and warm leads, not flood your database with bots.

Moreover, analysis and a clear understanding of what a potential client should look like will help to formulate requests to CPA networks more correctly.

How to choose a CPA network?

To get quality results from cooperation with partner networks, you should pay attention to the following aspects:

• Reputation of the network – the presence of real positive reviews on unbiased and independent aggregators is what is called a «green flag». You can see real reviews of CPA networks on such websites as Clutch and Trustpilot.
• Quality of leads – before signing a contract, find out how the network guarantees filtering out low-quality leads and people who are not the target audience of the business. What verification methods does the affiliate program use? Is it moderation, deep analytics, or AI tools? How exactly can the network prove the reality and quality of leads?
• The right direction – before starting cooperation, you should learn more about the niches in which the chosen affiliate network operates. If your business is focused on the sale of small boats for fishing, then a CPA network from the gambling niche is unlikely to give the necessary results. In order for an affiliate network to help you achieve good results, it is desirable that it has experience in your field and successful cases.
• Transparency of reporting – pay attention to those CPA networks that provide detailed analytical reports. These reports should show not only the number of leads, but also the sources of traffic, conversion, and campaign performance.
• User support – having a working technical support team that is ready to answer all your questions and help you solve problems is another good sign. Sometimes it happens that promotion strategies require immediate adjustments, so the speed of response of the technical support of a CPA network is critical.
• Terms of cooperation – too low prices under different CPA models should alert a potential client. Study the average cost of affiliate network services in your niche before choosing a specific company.
• Anti-forwarding systems and protection against fraud – a reliable CPA network should use fraud protection mechanisms. Bots, clickfrauds, fake applications – these are the things that even a trusted affiliate network can face. The way a CPA network protects its clients from such problems is a marker of the quality of its services.
• Flexibility of conditions – networks that offer flexible settings for offers, targeting, and creatives usually offer better results.

Taking into account at least some of the above conditions will help to avoid the most popular «diseases» of CPA networks and the corresponding promotion. But what problems can you face when working with CPAs?

What problems can arise with CPA networks?

Among all the advantages of CPA networks, there are several serious disadvantages of this promotion system. Many marketers dislike CPA for the following reasons.

Poor quality of leads

Unscrupulous CPA networks use bot farms and fake applications. Sometimes this is not always the fault of the network owners, but of webmasters who use bid generators and bots to increase the number of leads, but in the end, little changes. The result of such actions will be a large number of leads on paper and in reports, but the advertiser will not see any orders or activity.

Another problem can be a non-target audience. The traffic may be too «wide», the proper settings and selection of «donor» resources may be incorrect, and therefore the leads that get to the site will be uninterested in your products or services.

Clickfords and cheats

Clickfraud is one of the most common problems of CPA networks. Clickfraud is an artificial increase in the number of clicks to get a bigger reward from the advertiser. The problem is the same as with low-quality leads, and webmasters are usually to blame for clickfraud.

Artificial conversions are simulations of real users clicking on links. The source of such conversions can be either fake accounts or bots set up to perform a specific task.

Unreliable affiliate networks

A large number of CPA networks represented on the Internet are in fact unreliable offices with a dubious reputation. An indicator that you are dealing with such a company may be:

• lack of transparent analytics;
• obviously fake reviews on aggregators;
• too low prices and promises of «astronomical» results.

Conclusions

CPA networks are a tool for promoting business and finding new leads that can offer good results. Thanks to the flexible system of settings (CPI, CPE, CPL, CPS, CPC), you can find the necessary and, most importantly, effective advertising algorithm. However, CPAs also have some risks that you should keep in mind:

• low quality of leads, use of bots instead of engaging real people;
• clickfords and cheats for better performance;
• unreliable networks and publishing your ads on unwanted and dubious websites;
• incorrect targeting settings.

CPA networks can be an effective promotion tool, but only if the business owner understands all the potential risks. This strategy has both its advantages and controversial aspects, which is why many potential clients refuse to use CPA.

Serhii Ivanchenko

CEO

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