Important Update: This post is the 101 information about CPA Marketing, also known as CPA Arbitrage. I see many visitors coming to this page to look for more information about an affiliate marketing course called “CPA Arbitrage”. If you are looking for further information on this course, please visit this link. If you are here to learn more about CPA Arbitrage, and CPA Affiliate Marketing, please keep reading below.
Let’s Start with the definitions of CPC and CPM
In online advertising, widely known two advertising methods are CPC (Cost Per Click) and CPM (Cost per thousand impressions). In the CPC method, advertiser pays a fixed or variable $ amount per each click its site receives. In the CPM method, advertiser pays a set or variable $ amount per 1000 impressions its advertisement (banner, contextual, etc.) is shown regardless of CTR (Click Through Rates).
What is CPA ?
Compared to CPC and CPM methods, CPA is a newer advertising model. CPA is called “Cost per Action” or “Cost per Acquisition”. In the CPA method, advertiser doesn’t pay for the impression or click. Advertiser pays when an action is taken by visitor. Here are some popular CPA advertising offer types:
- User registers for the website/service (free or paid).
- User buys something (also called as CPS, cost per sale).
- User fills a short form (short survey, email, zip code, state, etc.)
- User fills a long form (insurance quote, long survey, school information, etc.)
- User registers for free trial (blockbuster, email marketing software, etc.)
Depending on the offer type advertiser sets a fixed $ amount per action. Advertisers either run an inhouse affiliate team and program or go to affiliate marketing companies.
In a higher level, affiliate marketing companies are the ones doing the CPA Arbitrage. But, affiliates also known as affiliate marketers sign up with affiliate marketing companies and promote the offer. Let’s show this with an example:
Blockbuster would like to do a CPA advertising campaign. They are ready to pay $80.00 per “free 30 days subscription”. Since they have the historical data on how 30 days free subscriptions work, they are happy with the amount they are willing to pay. They will win in this situation. (p.s. $ amounts are not related to blockbuster, they are given as an example).
Blockbuster doesn’t want to deal with every average Joe (this is a regular affiliate marketer). Therefore, bigger affiliate companies go to Blockbuster and promise certain level of volume (subscription numbers). Before or after going public with the offer, these large affiliate companies offer these offers to smaller affiliate companies with a lower payout (see the CPA arbitrage starting).
Here’s a quick diagram I’ve drawn to visualize the CPA arbitrage in general:
This is a very general diagram to show the CPA arbitrage in affiliate marketing. Depending on the vertical or niche, this diagram might change. For instance, in debt consolidation niche, same lead could be sold to different companies (unsecured debt, less than $10.000 debt, etc.)
I don’t want to get into details of CPA or affiliate marketing in this post since I want this post to be a clear definition/explanation of CPA Arbitrage.
Why did I need to write a post about basics of CPA Arbitrage? Because many beginners want to learn the basics of affiliate and online marketing. And I’ve seen many experts use the phrase “CPA Arbitrage”, but talk about totally different things.
If you’d like to test some CPA offers, I’d recommend NeverBlue, and Azoogle. These are two of the most reputable and trusted affiliate marketing networks in the industry. They have tons of offers from free zip submits, to CPS type offers, and they have one of the best tracking systems (which makes the beginner affiliate marketer’s job easier).
If you are a hard worker, if you love to test and track, CPA Arbitrage might be the best opportunity for you in the online world. Many online marketers, including myself, are making great amount of cash every day with CPA Arbitrage.
If you are new and interested in getting into affiliate marketing, here are some posts I’ve written about affiliate marketing with newbies in mind.
- Mindset for Affiliate Success
- Important Tips to Read if You are New to Affiliate Marketing
- Do You Need to Buy an Affiliate Marketing Course to Get Started?
- More Tips about Affiliate Marketing for New Starters
- Craigslist Affiliate Case Study – Step by Step Guide to How I’ve Generated over $5000 within 48 hours on Craigslist
I hope these posts will give you some basic direction about setting up your success mindset in affiliate marketing. If you put some hard work into it, affiliate marketing is the most rewarding and fun thing in the world. Good luck!