You've probably heard the stories of affiliate marketers using PPC advertising to promote CPA ringtone offers and making millions in the process. Well, by and large the days of ringtone riches are done, but there's still LOTS of money to be made promoting CPA offers and you don't necessarily have to use PPC.

As an affiliate marketer, my focus is primarily on added-value publishing, list-building and promoting pay-for-performance (per sale or percentage) products. (How's THAT for alliteration?) With those subjects emphasized in the Super Affiliate Handbook, CPA (Cost-Per-Action or Cost-Per-Acquisition) marketing is discussed only in brief, which is not to say that I don't promote CPA offers – I do – I just don't use or advocate CPA marketing (in its most common form) as a mainstay.

This article explains what CPA marketing is, it's advantages and shortcomings, and how I use it as an affiliate publisher.

What is CPA Affiliate Marketing?

CPA marketing can be defined as an “online advertising payment model in which payment is based solely on qualifying actions such as sales or registrations“.

In simplest terms – get someone to enter their email address (and/or snail mail address, zip code) into a form and you can make money as a CPA affiliate. Other ‘actions' including getting the visitor to take a poll or survey, fill out a form, or sign up for a newsletter.

Examples of CPA Offers

Here's an example of a $1000 grocery gift card offer from Affiliate.com that requires the visitor to enter an email address on the first page and then their snail mail address on the second page. With the snail mail address entered, the affiliate earns $1.65 per lead. Note: Most email submits pay in the range of $1.00 to $1.35 per lead.

Credit card offers can be quite lucrative, typically ranging from $5.00 per application on pre-paid cards and upwards of $50.00 per approval for premium credits such as the American Express® Preferred Rewards Gold Card.

Why Would a Merchant Pay Affiliates $10, $50 and even MORE Per Lead?

Big companies have big advertising budgets and rather than use that money to try and place their ads here, there and everywhere on the ‘Net, they understand and appreciate how the effectiveness of utilizing affiliate marketers to get the word out for them. They know that it's the affiliate who assumes the cost of running PPC traffic to the offer.

For example, it may cost an affiliate $25 to make $50 on a mortgage refinancing offer that simply requires completion of an online form. But the refinancing company stands to make thousands – make that 10's of thousands of dollars – from every new mortgage arranged. So, it's worth $50 to a mortgage broker to buy those leads. Anyone who fills in the form is targeted – they're actually looking for that type of product and if they don't buy today – the merchant can continue to advertise to them.

Essentially therefore, CPA affiliates are traffic brokers, i.e. they buy and sell traffic.

CPA Marketing – Pros and Cons

As with any business venture, working CPA offers has some distinct advantages as well as a few pitfalls.

Advantages

• If you have a list, or can drive traffic cheaply to either a landing page on your site or directly to the offer, earnings potential with CPA offers can be absolutely huge.

• Experienced (proven) affiliates can negotiate with CPA Network managers to increase the CPA rate, i.e. from $1.50 to $1.75 per lead.

• Many CPA campaigns involve freebies, such as free coupons, free product trials and buy-1-get-1-free offers which consumers simply lap up… ergo, easy sells.

• Direct linking tactics, e.g. from Google Adwords to the offer, negate the need for a website or list-building. (see also ‘Disadvantages' regarding this approach).

Disadvantages

• Your efforts to direct link from a PPC ad campaign might be stymied. For example, Yahoo does not allow affiliates to link directly to merchant offers. Google permits direct linking, but only one ad per url is allowed to show at a time, so you could end up in a bidding war with other affiliates which could kill profit potential.

• CPA Networks are very selective about whom they accept as affiliates. Most will phone applicants to determine how the affiliate plans to drive traffic and what offers they intend to promote. From the standpoint of an experienced affiliate, this is actually an advantage. However the requirement to explain can be a problem for new affiliates. Here is a list of typical questions that will be asked:

  1. Do you drive traffic via website promotion?
  2. If yes, how much traffic does your site receive on a monthly basis? (Are you an incentivized site?)
  3. What is the country of origin of the visitors to your site?
  4. Do you drive traffic via email promotion?
  5. If yes, what is the size of your email list?
  6. How do you build your email list? (purchase or create your own?)
  7. How often do you email your list out?
  8. Are there specific types of offers that work best for you?
  9. Are you currently working with any other ad networks? (If so, what is your average monthly revenue earned from them?)

• Inexperienced affiliates are at risk of losing money on direct linking campaigns.

• Payouts vary widely across networks so you must do your homework to get the best deal.

• “Here today, gone tomorrow” is my biggest complaint about CPA offers. I'm simply too lazy to constantly monitor whether campaigns are still running and/or chase after replacements.

The only way to gain experience with direct linking is to get in and get your hands dirty.

Research existing campaigns to find out what works – from the standpoint of longevity, i.e. the longer an ad has been up and running, the more lucrative the promotion. Find an offer, decide the maximum amount you are willing to invest on a cost per click basis, write the ad and then tweak, tweak and tweak some more. Even if you experience a loss or your earnings are marginal, you've no doubt learned valuable lessons about advertising and copywriting that will contribute to your success in the long run.

I Rarely use PPC for CPA offers

Having existing websites and large subscriber lists, I don't need to spend money on PPC advertising to earn from CPA offers. I simply put up a 125 X 125 banner on a blog sidebar (such as the MyLife.com banner at 101Date.com) or include promos in regular mailings to my list.

Where to Find CPA Offers

Although some CPA offers are available through the major networks, CPA networks specialize in cost-per-action campaigns. There seem to be hundreds of such networks, with new ones sprouting up daily. Examples of long-standing CPA networks include:

1. Affiliate.com
2. Pepperjam
3. ShareaSale
4. ShareResults

CPA offers come in all shapes and sizes. Here's a list of the top categories listed on Affiliate.com

• Exclusives
• Email and Zip Submits
• International
• Ringtones/SMS
• Automotive
• Biz-Opp/Education
• Incentivized Offers
• Cash Advance
• Dating
• Finance
• Health

So, that in a nutshell is CPA marketing explained, along with some of its advantages and pitfalls and how I promote CPA offers. Is it for you? That's up to you – however if you decide to try that route, I highly recommend that you pick up a tutorial on the subject that goes into more detail about how best to promote CPA.

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Learn MORE about CPA Affiliate Marketing

The good news – You don't need to spend 2K on CPA marketing training. Chris Cobb's CPA Arbitrage $77 complete system teaches you where and how to find the best CPA offers and how best to make money promoting them. What I particularly like about Chris' system is that in addition to taking the direct-linking approach, Chris advocates list-building – a long-term stratey that will help you save money on PPC advertising and make more money in the long run.

Indeed, he gets 7,000 – 8,000 new names and e-mails into his back office systems each and every day and he shows you how to set this up, so that ongoing sales and commissions keep coming in….

CPA Arbitrage comes with a workbook and live training videos about which Chris says, “I'm going to give you the very basics in the workbook and then I'm going to show you the 2 money-getting CPA models that I use to make hundreds of thousands each and every month… “

Just reading the CPA Arbitrage sales copy will give you a good idea of the possibilities.