CPA contextual advertising and traffic arbitrage. CPA networks: the whole truth from the CPA chain marketer

CPA ("C-hey", an abbreviation of the phrase Cost Per Action - "Pay per action") is a model of payment for online advertising, in which only certain actions of users on the advertiser's website are paid.

CPA model - One of the most cost-effective advertising payment options. The advertiser pays not for clicks or impressions, the effectiveness of which is difficult to measure, but for specific consumers who have confirmed their interest in the product with targeted actions.

Interpretation of the term in the CIS countries and abroad

In the West, a slightly different interpretation of the term CPA - Cost Per Acquisition - “price per acquisition”. This is because the CPA model of payment is often used in advertising online stores, for which the purchase of the product by the buyer is the action that the advertisers pay for. In RuNet, this interpretation of the term has not taken root. Instead, the abbreviation is analogous, CPS (Cost Per Sale) - payment for a perfect sale.

Development of the CPA model in Runet

Affiliate programs can be considered the prototype of the CPA model in RuNet. The first advertising campaigns on the Internet according to the CPA model were tracing the offline versions of affiliate programs: the order form was set on the advertiser's website, in one of the lines of which it was proposed to enter the name of the person who contributed to the purchase.

Then the mechanism of such promotions was improved and the advertiser's partners began to receive a special personal link to the order form (“referral link”), thanks to which it was possible to track the buyers listed by each partner. Referral programs of this kind are still popular in the segment of entertainment sites, online stores, MMORPG, as well as on resources devoted to making money on the network. (fig. 4).

The next stage in the development of the CPA model was its distribution as a finished advertising product from banner networks. This allowed us to save the advertiser from installing complex software on their website to manage the affiliate program and shift all technical issues to the shoulders of the banner network specialists.

CPA chain. How does a CPA network work?

The CPA marketing chain includes 4 links:

1. CPA network. He controls the observance of the rules by the partner and the company, is a kind of “trust link”, for which he receives his percentage.

3. Partner (webmaster). It attracts traffic to the company's website by any available means (based on its capabilities and knowledge).

4. User (visitor, potential customer). He visits the company's website through a unique webmaster link, performs the necessary actions, for which payment is made.

How does a CPA network work?

CPA network - This is a service intermediary between the advertiser and the performer. The webmaster enters the CPA network, selects the offer, indicates his source of traffic, begins the promotion of the offer, makes a profit (fig. 5).

Fig. 5. An example of a site with mobile offers of a CPA network

There are at least 2 links in the CPA offer: advertiser and partner. The advertiser's task is to create an offer (offer) based on their needs. The partner’s task is a proposal to promote and receive payment for the actions of users whom he attracted.

CPA affiliate program requires more intellectual work and costs from the webmaster (publisher). He needs to not only attract traffic by increasing the quantitative traffic to his site. He needs to take care of the final action of each attracted user. And for this you need to take care of the quality of the traffic, make it as targeted and useful as possible for a particular offer.

How does CPA work? Pros and Cons of CPA Models

When the CPA model appeared, advertisers were only able to pay for specific actions performed by users. Moreover, the action could be any - filling out a questionnaire, subscribing to a newsletter, registering on the site, an application confirmed by a call center, etc.

Advertisers attract webmasters, people who know where to get targeted traffic, to find a product audience. Anyone can be a webmaster - the site owner, a specialist in contextual advertising or in targeting. If there is a user in the traffic attracted by him who performed the necessary action, the webmaster receives money for this - for example, a percentage of the cost of goods.

Pros and Cons of CPA Models

Advantages of CPA Models for Advertisers

• Fixed costs for Internet marketing: the cost of the target action is clearly defined, which greatly simplifies planning.

• Placement on thematic sites without the need to negotiate, send out banners and pay each owner individually.

• The ability to outsource the elements of affiliate marketing that you don’t want to do (say, traffic accounting and payouts with complex schemes).

• In highly competitive topics (banks, cars, etc.), the CPA conversion price may be lower than when working with contextual advertising or SEO.

Advantages of CPA-models for owners of thematic sites, publics in social networks, etc.

• The most attractive earning opportunities - affiliates are much more profitable than in search engine advertising networks.

• The ability to switch between the offers that interest your audience the most, thereby optimizing profitability.

Cons CPA Models for Advertisers

• The need to sign “paper” contracts before starting work.

• The complexity of the entry is for small advertisers - only those partners who are willing to pay long, a lot and consistently are interested in networks (the ideal partner is a bank, an airline).

• The need to compete with other advertisers for webmasters is to increase the size and duration of payments.

• You need to keep an eye on unscrupulous webmasters who can cause poor-quality traffic or cheat while writing cookies to increase commission payments (as a rule, CPA networks themselves track such unscrupulous participants).

Cons CPA-models for all partners

• Opaque contractual relationship. However, for a good negotiator this can be a plus.

• The optionality of representatives of some networks is disruptions in payments, communication problems.

Advertisers who benefit from the CPA model

Paying for actions is not for everyone. Firstly, we are talking only about product advertising. Secondly, the CPA model is effective for companies that use the Internet as one of the main sales channels. As a rule, sites have landing pages that are the source of calls, letters, requests, leads, online purchases.

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Contextual advertising has the form of a text link containing a brief description close to the context of the site where it is placed. Being part of the content of the page, such an ad arouses more interest in the user than other types of advertising. This is evidenced by CTR indicators. You can order placement of ads in such advertising networks as Google AdWords, Yandex.Direct, Begun:

Significantly increase the effectiveness of this type of advertising allows special CPA systems, such as, for example, Admitad, Cityads.ru or Ad1.ru. Such networks not only attract advertisers, but also select resources that are appropriate in meaning, assist in preparing ads, etc. All that is required of the advertiser is to conclude a contract with the network, determine the target action and indicate the price or percentage of profits, replenish the budget, load banners and wait for the clients to “tumble down”.

The work of a webmaster is somewhat more complicated. He must clearly define the target audience when choosing an offer, configure the site as necessary, and master the intricacies of billing. However, there are such craftsmen who are able to configure the purchase of traffic from contextual advertising so that the profit from the affiliate program exceeds the advertising budget ( traffic arbitration) And now about everything in more detail:

CPA contextual advertising

More recently, the phrase "contextual advertising" was most often mentioned in conjunction with "CTR". Now he has been replaced by CPA. What is the reason for such changes? CPA or Cost per Action means " cost per action».

Synonyms for this term can be considered CPL ( cost per lead - price per lead) The main goal of this direction of lead generation is to collect demographic and contact data, while anonymous users can perform actions under classical CPA. A pay-per-purchase model is called Cost Per Sale or CPS.

How are such two concepts as contextual advertising and CPA related? Everything is extremely simple - when you purchase ads, you pay for clicks (visitors). In Cost Per Action, an advertiser pays only for actions performed by users on his property ( registration, click, purchase of goods, service order, subscription to newsletter), not for abstract ad impressions.

Who Should Use CPA Advertising?

The main advertisers in this area are online stores, hosting providers, banks, travel agencies, etc. Among the representatives of offline businesses are construction companies, car repair shops, law firms, etc.

How to optimize the cost of CPA advertising?

For example, the cost of 1 visitor is 1%, in which case the CPA will be 1 ruble / 1% \u003d 100 rubles. The price of one target action will be 100 rubles. Now it remains to analyze how contextual advertising CPA is beneficial for your business.

To do this, follow these steps:

• Calculate your average check;
• Determine the amount of profit from 1 order;
• Compare the size of your CPA with the amount of revenue from 1 order.

Ways to optimize contextual advertising for CPA

The first thing to do is to identify key queries and ads that “eat” your budget without provoking targeted actions. The following is an example analysis:

Ads that don’t bring conversions should be disabled or reduced to a minimum limit.
The second step is to search for targeted phrases and ads that bring you sales but are above your target CPA. In the example below, you can see which keyword has a CPA below 100 rubles:
The second and third positions need optimization. Lower your bid for disadvantageous key requests, and for those that have a good CPA, on the contrary, increase.

So, to conduct optimization of contextual advertising for CPA you need:

• Collect statistics for each ad and key CPA request;
• Find keys and ads that "eat money" and do not bring sales and turn them off;
• For key phrases and ads that bring sales with a low CPA, lower bids, and for those that provide sales with high CPA, increase bids. This will provide more traffic with a fairly high conversion probability.

CPA traffic arbitration

To implement the arbitration strategy in the CPA partner, the webmaster tries to attract cheap traffic from sources permitted by the terms of cooperation. If in the future the attracted users begin to carry out targeted actions, then the payments that the webmaster receives will allow him not only to cover the costs of attracting traffic, but also make good money on the difference between the attracted and sold traffic (CPA arbitration).

Practice shows that you can monetize any traffic. Some webmasters even resort to the services of professional designers to prepare advertisements:

Risks in the CPA Market

The number of CPA partners is growing every day. The cost of entering such networks into the business has significantly decreased in recent years, which allows you to launch your own network without significant investment. Systems attract webmasters with promises of high payouts.

However, the network receives payment from the advertiser only after he receives the desired actions, but the webmasters demand payment for the attracted traffic immediately. Such a scheme often leads to a cash gap and the impossibility of fulfilling the obligations undertaken by the network in full. That is why it is worth trusting only trusted networks.

But “pitfalls” can be expected not only from the side of networks, but also from the side of webmasters. Quite often there are situations when webmasters bring black traffic, use proxies that assign fake data to users, and change the addresses of sites from which users clicked. Cookies and cookie dropping, motivated traffic may occur.

However, the main analytical programs prevent attempts to deceive. Today, the Russian CPA advertising market is estimated at more than 3.5 billion rubles per year:

Advantages and disadvantages

The advantages of CPA models are transparency and high quality traffic. At the same time, the advertiser can attract the target audience, saving the budget. This gives CPA contextual advertising all the chances to become as effective a tool as RTB advertising. However, she has her own "cons".

First of all, this is the quality of the audience ( even despite the fact that the model attracts users who perform certain actions, they can bring conversion only once) For example, if we are talking about a campaign that will be “led” by those who love a “freebie”.

It is also worth noting that the CPA does not function well in the conditions of price elasticity, taking into account only the factor of the required actions. This leads to the fact that advertisers do not increase the budget for advertising at those times when it is worth doing, because the quality of traffic is growing:

How to set up contextual advertising for arbitration?

Services such as Google AdWords, Yandex.Direct and Begun are time-tested and offer truly high-quality resources for advertising. The webmaster is required to correctly configure the context parameters and as a result he will receive a target audience interested in buying the goods and services offered.

Before setting up the context, you should determine the target audience. Some experienced craftsmen risk experimenting on this issue. In some cases, this technique works. However, novice optimizers should not do this. They should carefully study the main aspects and only then start looking for a new audience. In order to correctly create advertising campaigns, it will not be superfluous to study instructions and manuals on how to buy contextual advertising on Google or Yandex.

Considering the fact that contextual advertising is rightfully considered the fastest, in a few days millions of users will be able to see your ads. You will have the opportunity to move your offers on untwisted resources. However, it is worth recalling that the context also refers to one of the most expensive types of advertising. Therefore, an arbitrageur will need a couple of hundred dollars to launch several advertising companies.

findings

In order to start making money on arbitration, first study the theory well, prepare a small starting capital and start acting. Do not forget that CPA traffic arbitrage is a risky business and you can "drain" all your capital without making a profit. But even if this happens, do not stop. Consider failure as an experience that can come in handy when launching your next possibly more successful advertising campaign.