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Cost Per Action
What is Cost Per Action or CPA?
Cost Per Action or CPA is a pricing model in the advertising industry used in performance campaigns. It indicates the cost advertisers pay for every action users complete on a digital advert. An action could be installing, registering, clicking on a link, etc.
What is CPA marketing?
The CPA marketing model involves:
- A publisher (seller of ad inventory).
- Advertiser (who wants to promote something on a publisher’s inventory)
- A CPA network (earns a commission by connecting publishers to advertisers).
Publishers and advertisers sign up with a CPA network. Every time an action occurs on the ad, the publisher gets paid by the advertiser. The CPA network earns its share in the form of a commission fee from both publishers and advertisers.
How is CPA calculated?
Advertisers can calculate CPA as follows:
Total advertising cost / Total number of actions
Ad inventory, ad slot, or ad space is the total amount of space available on an app or website where advertisers can display their ads.
Cost Per Click
In the CPC or Cost Per Click model, advertisers pay publishers a certain amount for every click the ad receives. CPC is sometimes referred to as PPC or Pay Per Click.
Cost Per Mille
In the CPM or Cost Per Mille model, advertisers pay publishers/app developers a fixed amount for every 1000 impressions on the ad shown on the publisher’s app.
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