by Joe Tedd
ContextWeb Advertiser Advisor

CPA - Cost per action; CPC - Cost per click; CPL - Cost per lead; CPM - Cost per thousand? That’s a lot to choose from.

Here’s what I’ve found works best for me in my vertical and leads to the best conversion opportunity.

Let me begin by stating I believe all methods are good in their own rights in terms of conversion. While I’ve heard CPC tends to work well across a wide range of marketing objectives by providing great exposure for driving online audience results, in my vertical, my main objective is to achieve increased sales, and for this I find the CPA model to be the best fit for my purposes.

The bottom line is how many CPA’s or CPC’s you require to get a sale.
CPC may work well in terms of driving targeted audience to a site and overall contributes to the sales, while CPA tends to work well in terms of the overall revenue of the site since you only pay for sales conversions and not every click.

Revenue is likely to increase from an advertiser’s point of view utilizing a CPA model.

It should ideally improve the efficiency and the return on investment of online ad spends. When utilizing a CPA model, you help reduce the risk of click fraud as well, something every advertiser must be aware of in the online ad space today.

In my opinion, the CPA model brings more pressure on publishers & advertising networks. Publishers will no doubt come under pressure with the CPA model, but this should be a good thing as publishing networks can develop new & innovative ways to push an advertisers message out across their network, pairing up the right advertisers with the most appropriate publishing networks, so now the pressure of conversion to a sale will now be also on the publisher’s shoulders, whereas in CPC scheme, an advertisement may be displayed many times, but the advertiser pays based only on the number of user clicks, ultimately - no matter what model you choose to use (CPM, CPA, CPC) you end up saying “How much did I pay for each lead/sale”, for us at Diamond Harmony, we find the CPA model most effective.

Joe Tedd has over 25 years of customer support & technical analyst experience, Beginning his career in the Telecom vertical, with companies such as Rolm, VMX, and IBM & OCTEL, achieving various technical certifications for platforms along the way. When the internet boom exploded, JT steered his career path down a different road, putting his admin & office skills to use registering corporate domains and managing intellectual properties for clients of NameEngine.com, creating and promoting emerging technologies for Databites.com, as well as serving as Customer Service & Audio Production Manager for Voicemate.com ; serving the fortune 500 financial services market, producing and editing content for the voice content aggegator. More recently, JT had the distinction of becoming Did-It.com’s first client services specialist, and after working in the PPC-SEM field with them for a few years, moved on to manage search engine strategies for Diamond Harmony, before being promoted to operations manager.

Tags: CPA, CPM, CPL, adnetworks, contextweb

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