Did you ever ask yourself how the CPA marketing model is different from the traditional affiliate marketing?
This post is a comparison between the simple affiliate marketing and the CPA model.
Let’s start with a short introduction to affiliate marketing and CPA marketing.
What is affiliate marketing?
The affiliate marketing enables a person to promote somebody else’s products and earn a commission from each sale.
The persons (or companies) who sell the products are usually called vendors, and the people who are looking to make money by selling other people’s products are called affiliates.
Numerous companies have their internal affiliate programs, like Amazon, eBay, Walmart, web hosting companies, web services providers, etc. In this post, I will refer more to the affiliate and CPA networks.
What Is CPA Marketing?
CPA marketing is just a more advanced form of affiliate marketing.
“CPA” is the abbreviation from Cost Per Action or Cost Per Acquisition.
While the affiliate networks pay you only when someone referred by you makes a purchase, the CPA offers can also pay you when someone takes a specific action that doesn’t necessarily mean to be a purchase.
Here are a few examples when a CPA offer can pay you:
- A product purchase
- Email submit (lead)
- Zip code submit
- App install
- Free account registration
- Trial registration
The advertiser (vendor) is the one who decides the conversion point of an offer.
An advertiser is a person or a company who has submitted the offer to the CPA network.
Many times in the CPA networks you will also find references to “affiliates” as “publishers.”
Why would someone pay me for a free email submit?
That’s an excellent question.
Typically, the people or companies who advertise their offers using the CPA networks know very well the average price of their customer. Even though it looks that they are throwing money away, they will be making much more money than what pay you.
If you have some experience with affiliate marketing, you’ll probably know that a good sales funnel can do wonders regarding ROI.
There are also some big companies who advertise their products using the CPA networks, because they’ve found that there is more profitable for them to gain their customers this way, instead of promoting their offers by themselves.
Is the CPA marketing more profitable than affiliate marketing?
I can’t say that CPA or affiliate marketing is more profitable because both models can be very profitable if done right.
What is an affiliate network?
An affiliate network is an online marketplace where the people who want to sell their products list their products to find people interested in earning money by promoting their products.
The affiliate networks make the connection between the vendors and affiliates in a win-win situation.
The vendors have a product to sell and are looking to get their products sold, while the affiliates are looking for products to promote and earn a commission for every sale.
A few other advantages of using an affiliate network as a product creator are:
- The affiliate network will help you find affiliates
- You don’t have to spend your own money on traffic (unless you want to test your funnel and make sure it’s converting very well before finding affiliates)
- The affiliate network handles all the payments so you don’t have to worry about implementing an internal payment infrastructure
- Most of the affiliate networks will give you detailed stats about your sales, conversion rates, refunds, etc.
- You can get a very high volume of sales from affiliates if you have a good product
- You don’t need to have a built-in platform for tracking your affiliate’s sales since the network will take care of that
As an affiliate, you will get paid a commission for every sale you make. The commission value will usually vary from vendor to vendor and from product to product, and you are typically paid an between 30% to 70% from the product price.
When the product is a part of a more complex sales funnel, you can even get paid 100% of the value of the front-end sale. That is typically a cheap product priced between 5-$20.
When the customer advances through the sales funnel, the product prices increase, and you can usually earn between 30-50% of the cost of the products sold within the same funnel (the backend).
These are a few standard commissioning tactics, but as I already mentioned above, the commissions will vary from product to product.
You don’t usually need to pass any phone verification to become an affiliate in a traditional affiliate network, and in most of the cases, you don’t even need to have a website.
A few examples of standard affiliate networks are:
What Is A CPA Network?
A CPA network is very similar to an affiliate network, but there are a few differences between these two.
The first significant difference between a CPA network and an affiliate network is that CPA networks choose their affiliates more carefully.
Unlike the most affiliate networks where you are automatically accepted, the CPA networks can reject your application if you are a complete beginner and you cannot prove you have previous marketing experience.
To be accepted in CPA networks, you will also have to provide details on how you are going to promote their offers, what’s your marketing experience, and you might be required to have a website.
Usually, the CPA networks don’t accept people without a marketing experience. Some networks will also require a phone interview before approving your application. Here’s a list of a few CPA networks more beginner friendly that doesn’t require a phone interview.
The CPA networks have stricter rules than the affiliate networks because the advertisers commonly require specific traffic sources, only traffic from particular countries, and so on.
Because some CPA offers are paying for leads, ZIP code submits, free account registrations, trials (unlike of only paying for sales like the simple affiliate networks), these will predispose the networks to numerous cheat attempts from their affiliates.
That’s the main reason why the CPA networks choose their affiliates more carefully.
There are a lot of CPA networks and below I have listed only a few of them.
A place where you can find more CPA networks and offers to promote is Offervault.
Offervault is like a search engine for CPA offers.
Affiliate Marketing Vs CPA Marketing
Both the CPA marketing and affiliate marketing have their advantages and disadvantages, so let’s make a direct comparison.
The most obvious advantage of the CPA model is that you don’t have to sell a product to earn a commission. Making someone pull out his credit card is much harder than making him give you his email address, installing a free app or starting a product trial.
An advantage of the CPA networks is that once you have created an account, an affiliate manager will be automatically assigned to you.
You can contact your affiliate manager and ask what offers convert best for a specific traffic source, if your landing pages are complying with a specific offer, etc. It’s in their interest to help you, because the more money you make, the more money they make.
The disadvantage of the CPA networks is that they usually don’t accept beginners, while it’s effortless to start with a traditional affiliate network.
So, it’s easier to promote some CPA offers, but it’s harder to get accepted by the network.
Both the affiliate marketing and the CPA marketing model can bring you some nice commissions when someone buys a product.
The commissions are substantially lower when you are promoting CPA offers that pay on email address submissions, ZIP submits, or other simple actions. Therefore, you will need a lot more conversions to make a profit, especially when you are paying for traffic.
Most of the affiliate offers found on networks like JVZoo or ClickBank will be part of a funnel and you are usually paid a commission throughout the whole funnel. That’s not the case for the CPA offers when you typically only earn a commission from the front-end.
Allowed traffic methods
While you can use almost any traffic source to promote the offers from the traditional affiliate networks, when you push CPA offers, your advertising methods are typically limited and chosen by the vendor.
The quality of the offers
A lot of the CPA offers are merely garbage, scams, useless products, and sometimes the vendors do not pay. Therefore, sometimes, it can be tough to find a good CPA offer that deserves promoted.
There are also a lot of low-quality offers listed on the affiliate networks, but I would still give the affiliate networks a plus when it comes to comparing the quality of the offers. There are also many excellent products, especially if you promote physical products.
Payments & Refunds
The CPA networks are usually paying you fast (weekly or biweekly) and there are no refunds.
You will sometimes need to wait a bit more to get paid from some of the affiliate networks (an example would be Clickbank), but there are also networks that pay you instantly in your PayPal account (JVZoo, WarriorPlus) if you are an established affiliate or if the product vendor knows you.
However, when you promote products listed on the standard affiliate networks, you will face refunds, chargebacks, and sometimes you won’t be paid until the product’s money back guarantee period has expired (30,60,90 days).
Getting accepted into networks
When you apply to become an affiliate for a conventional affiliate network, you will usually get your account approved instantly, and you can start promoting offers right away.
When you apply to a CPA network, you will generally need to wait until your account is manually checked and approved by an affiliate manager.
Sometimes these networks require a phone interview, additional details on how you’re going to promote their offers, and you might even need to have a website (or at least a landing page, opt-in page or some kind of proof that you know what you’re doing).
The long-term advantage
A disadvantage of the CPA model is that the CPA offers, especially the offers which doesn’t require a sale, will often be removed without any notice.
Therefore, if you include CPA offers in a funnel or email follow-up, you need to regularly check the links and see if the offers are still available. Otherwise, you will just waste your traffic.
The offers found on the traditional affiliate networks will usually be available for an extended period and you don’t have to check every day if the product it’s still for sale.
Regardless the affiliate model you choose, you are still an affiliate marketer and you get paid for promoting other people’s products.
You don’t need to limit yourself to a single model, and you can successfully combine both affiliate marketing and the CPA marketing. Both have their advantages and disadvantages, but both can be extremely lucrative.
If you are a beginner, I would advise you to start with affiliate marketing since it’s easier to get accepted in the affiliate networks and you don’t have so many restrictions as to when it comes to the promotion of the CPA offers.