Cost per action or pay per action (PPA) is an online marketing billing method in which advertising costs are calculated according to specific user actions. Said action can be determined individually by you. They can be, for example, the following:
Depending on whether one of the actions was taken, a commission is due. These are the cost per action.
How does cost per action work?
With the CPA billing method, the costs are linked to conversions. This means that all actions that occur on your website or landing page must be paid for. To evaluate how successful your campaign was, you can then access the analysis tools of your website.
How is the CPA calculated?
To calculate the CPA you need the following formula:
Amount of budget spent ÷ number of all actions = CPA
Example:
You place ads for a total of 200 $, 100 actions were triggered according to your target intention. Thus you have a CPA of 2 $. From this value you can see that one action cost you on average 2 $.
What are the advantages and disadvantages of CPA?
The CPA model has several advantages and disadvantages.
ADVANTAGES
DISADVANTAGES
Transparent cost structure and simple evaluation of the campaigne
Higher base price than for example PPC and more commitment required
Olga Fedukov completed her studies in Media Management at the University of Applied Sciences Würzburg. In eology's marketing team, she is responsible for the comprehensive promotion of the agency across various channels. Furthermore, she takes charge of planning and coordinating the content section on the website as well as eology's webinars.
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