CPO stands for cost per order and is part of online marketing, among other things. CPO is a sub-area of cost per action and describes all costs incurred for a sale, an order or a lead. All costs incurred for advertising, subscriptions and mandatory shipping costs are included in the order costs.
The CPO makes it possible to evaluate the effectiveness of marketing campaigns in relation to the budget used and has a clear advantage: the seller can use advertising measures more efficiently and in the end only pays when a sale or conversion has actually been made.
With Cost per Order, the total cost of the campaign is divided by the number of responses. The CPO is calculated with the following formula:
|CPO = Cost action / Number of reactions.|
CPO is primarily used in Internet advertising. In this way, the success of an advertisement can be precisely measured. Especially in affiliate marketing, however, it is an important value to be able to estimate the costs per order. Here, the CPO is used to determine what fee the seller has to pay to the website operator who places advertisements for his products.
| – Reliable billing model|
– Payment is made only in case of success
– Spreading losses are minimized
| – Good optimization of the website is important for affiliate|
– Conversion optimization necessary
– Despite tracking procedure often not ideally traceable