contextual advertising has the form of a text link containing short description A that is close to the context of the site where it is hosted. 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 ad placement in such advertising networks as Google AdWords, Yandex.Direct , Begun :
Special CPA systems, such as, for example, Admitad, Cityads.ru or Ad1.ru, allow to significantly increase the effectiveness of this type of advertising. Such networks not only attract advertisers, but also select relevant resources, assist in the preparation of ads, and so on. All that is required from the advertiser is to conclude an agreement with the network, determine the target action and indicate the price or percentage of profit, replenish the budget, upload banners and wait for the customers to “fall down”.
The work of a webmaster is somewhat more complicated. He must clearly define target audience when choosing an offer, it is necessary to set up the site in the necessary way, to master the intricacies of billing. However, there are such craftsmen who are able to set up 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:
Contextual advertising based on the CPA principle
More recently, the phrase "contextual advertising" was most often mentioned in conjunction with "CTR". Now it has been replaced by CPA. What is the reason for such changes? CPA or Cost per Action means " cost per action».
Synonyms of this term can be considered CPL ( cost per lead — cost per lead). The main goal of this direction of lead generation is to collect demographic and contact data, while with the classic CPA, actions can produce anonymous users. The pay-per-acquisition model is called Cost Per Sale or CPS (price per sale).
How are such two concepts as contextual advertising and CPA related? Everything is extremely simple - by purchasing ads, you pay for clicks (visitors). In Cost Per Action, the advertiser pays only for the actions performed by users on his resource ( registration, click, product purchase, service order, newsletter subscription), and not for abstract ad impressions.
Who is CPA advertising suitable for?
The main advertisers in this area are online stores, hosting providers, banks, travel agencies, etc. Offline business representatives include construction companies, auto repair shops, law firms, etc.
How to optimize the cost of CPA advertising?
For example, the cost of 1 visitor is equal to 1%, in this case the CPA will be equal to 1 ruble/1%=100 rubles. The price of one target action will be 100 rubles. Now it remains to analyze how profitable CPA contextual advertising is 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 income from 1 order.
Ways to optimize contextual advertising for CPA
The first thing to do is to identify keywords and ads that eat into your budget without triggering targeted actions. Below is an example analysis:
Ads that are not converting should be disabled or lowered to the minimum bid.
The second step is to look for targeted phrases and ads that bring you sales but are above your target CPA. The example below shows how keyword has a CPA below 100 rubles:
The second and third positions need optimization. Reduce the bid for unprofitable key queries, and for those that have a good CPA - on the contrary, increase.
So, to optimize contextual advertising for CPA, you need to:
- Collect statistics for each ad and key query by CPA;
- Find keys and ads that “guzzle money” and do not bring sales and disable them;
- Reduce bids for keywords and ads that generate sales with a low CPA, and increase bids for those that generate sales with a high CPA. This will provide more traffic with a fairly high conversion rate.
CPA traffic arbitrage
To implement an arbitrage strategy in a CPA affiliate, the webmaster tries to attract cheap traffic from sources permitted by the terms of cooperation. If in the future the attracted users begin to perform targeted actions, then the payments that the webmaster will receive will allow him not only to cover the costs of attracting traffic, but also make good money on the difference between attracted and sold traffic (CPA arbitrage).
Practice shows that you can monetize any traffic. Some webmasters even use the services of professional designers to prepare advertisements:
Risks in the CPA market
The number of CPA affiliates is growing every day. The cost of entry of such networks into the business has decreased significantly in recent years, which allows you to launch your own network without significant capital investments. Systems attract webmasters with promises of high payouts.
However, the network receives a payment from the advertiser only after he receives the desired actions, but the webmasters require payment for the attracted traffic immediately. Such a scheme often leads to a cash gap and the impossibility of fulfilling the obligations assumed by the network in full. That is why you should trust only trusted networks.
But "pitfalls" can be expected not only from networks, but also from webmasters. Quite often, situations occur when webmasters bring "black" traffic, use proxy servers that assign fake data to users, change the addresses of sites from which users have switched. There may be cookiestuffing and cookiedropping, motivated traffic.
However, the main analytical programs stop attempts of deception. Today, the CPA advertising market in Russia is estimated at more than 3.5 billion rubles a year:
Advantages and disadvantages
The advantages of the CPA model 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 every chance to become as effective as RTB advertising. However, she also has her “cons”.
First of all, it is the quality of the audience ( even though the model attracts users who perform certain actions, they can bring a conversion only once). For example, if we are talking about a promotion that those who love “freebies” will “lead to”.
It is also worth noting that the CPA does not function well in conditions of price elasticity, taking into account only the implementation of the required actions. This leads to advertisers not increasing their advertising budget when it is worth it, as the quality of traffic increases:
How to set up contextual advertising for arbitrage?
Services such as Google AdWords, Yandex.Direct and Begun are time-tested and offer really 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 offered goods and services.
Before you start setting up the context, you should define the target audience. Some experienced craftsmen risk experimenting in this matter. In some cases, this approach 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 competently create advertising campaigns, it will not be superfluous to study the instructions and guides on how to buy contextual advertising on Google or Yandex correctly.
Given the fact that contextual advertising is rightfully considered the fastest, millions of users will be able to see your ads in a few days. You will have the opportunity to move your offers on promoted resources. However, it is worth recalling that the context also refers to one of the most expensive types of advertising. Therefore, an affiliate manager will need a couple of hundred dollars to launch several advertising campaigns.
conclusions
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. Treat failure as an experience that can be useful in launching the next most successful advertising campaign.
CPA ("c-pi-hey", an abbreviation for the phrase Cost Per Action - "Pay for action") - 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 through 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 for acquisition" is common. This is because the CPA payment model is often used when advertising online stores, for which the purchase of a product by a buyer is the action that advertisers pay for. In Runet, this interpretation of the term did not take root. Instead, an analogous abbreviation is used, CPS (Cost Per Sale) - payment for a completed 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 based on the CPA model were like offline versions of affiliate programs: an order form was installed 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 brought by each partner. Referral programs of this kind are still popular in the segment of entertainment sites, online stores, MMORPGs, as well as on resources dedicated to making money online. (Fig. 4).
The next stage in the development of the CPA model was its distribution as a ready-made advertising product by banner networks. This made it possible to save the advertiser from installing a complex software on your website to manage the affiliate program and put all the technical issues on 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. Controls the observance of the rules by the partner and the company, is a kind of "trusted link", for which he receives his percentage.
3. Partner (webmaster). Attracts traffic to the company's website by any accessible ways(based on their capabilities and knowledge).
4. User (visitor, potential client). 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 is an intermediary service between the advertiser and the performer. The webmaster enters the CPA network, selects an offer, indicates his traffic source, starts promotion of the offer, and makes a profit (Fig. 5).
Rice. 5. An example of a site with mobile offers CPA network
A CPA offer has at least 2 links: an advertiser and a partner. The task of the advertiser is to create an offer (offer) based on their needs. The task of the partner is an offer to promote and receive his payment for the actions of the users he has attracted.
The CPA affiliate program requires more intellectual work and costs on the part of the webmaster (publisher). He needs not just to 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 traffic, make it as targeted and useful as possible for a specific offer.
How CPA works. Pros and cons of the CPA model
When the CPA model emerged, advertisers were able to pay only for specific actions taken by users. Moreover, the action could be anything - filling out a questionnaire, subscribing to a newsletter, registering on the site, an application confirmed by a call center, etc.
To find an audience for a product, advertisers involve webmasters - people who know where to get targeted traffic from. Anyone can be a webmaster - a site owner, a specialist in contextual advertising or targeting. If there is a user in the traffic he attracted who has performed the desired action, the webmaster receives money for this - for example, a percentage of the cost of the goods.
Pros and cons of the CPA model
Advantages of the CPA model for advertisers
- Fixed costs for Internet marketing: the cost of a targeted action is clearly defined, which greatly simplifies planning.
- Placement on thematic sites without the need to negotiate, send out banners and pay each owner separately.
- The ability to outsource those elements of affiliate marketing that you do not want to deal with (for example, traffic accounting and payouts for complex schemes).
- In highly competitive topics (banks, cars, etc.), the CPA conversion cost may be lower than when working with contextual advertising or SEO.
Advantages of the CPA model for owners of thematic sites, publics in social networks, etc.
- The most attractive opportunities for earning - "partnerships" are much more profitable than in the advertising networks of search engines.
- The ability to switch between offers that interest your audience the most, thereby optimizing profitability.
Cons of the CPA Model for Advertisers
- The need to sign "paper" contracts before starting work.
- Difficulty of entry for small advertisers - networks are only interested in those partners who are willing to pay for a long time, a lot and stably (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 watch out for dishonest webmasters who may be driving low-quality traffic or fraudulently setting cookies to increase commission payments (as a rule, CPA networks track such dishonest participants themselves).
Cons of the CPA model for all partners
- Non-transparent contractual relationship. However, for a good negotiator, this can be a plus.
- Optionality of representatives of some networks - failures with payments, problems with communications.
Advertisers who benefit from the CPA model
Paying for ads isn't for everyone. First, 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, websites have landing pages that are the source of calls, letters, applications, leads, online purchases.
