I’m sure you’ve heard of CPA marketing and wondered how is it different than affiliate marketing?
This post is a comparison between the simple affiliate marketing model and the CPA affiliate model.
Let’s start with a short introduction to affiliate marketing and CPA marketing.
What is affiliate marketing?
Affiliate marketing is, in simple words, the form of marketing through a person can promote somebody else’s products and earn a commission from each sale.
The persons who are looking to sell their products are usually called vendors and the people who are looking to make money by selling other people’s products are called affiliates.
There are a lot of companies who have their own internal affiliate programs (like Amazon or other stores selling physical products, web hosting companies, web services providers, etc.), but in this post, I will talk more about the affiliate and the CPA networks.
What Is CPA Marketing?
CPA marketing is just a more advanced form of affiliate marketing and “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, when it comes to the CPA offers, you are paid when a person referred by you takes a specific action that doesn’t necessarily mean to be a purchase, including:
- A product purchase
- Email submit (lead)
- Zip code submit
- App install
- Free account registration
- Trial registration
Who decides when the offer pays you, is the advertiser (vendor).
An advertiser is a person or a company who has listed the offer to the CPA network.
Many times in the CPA networks you will also find references to “affiliates” as “publishers”, but it’s exactly the same thing.
Why Would Someone Pay Me For A Free Email Submit?
You may be wondering “why would someone pay you for a free email, a zip code submit, a free account registration or a product trial? Why would an advertiser pay me for someone who only performs a free task”?
Usually, the people or companies who advertise their offers using the CPA networks know very well the average price of their customer and the truth is that they will be making much more than what will pay you.
If you have some experience with affiliate marketing, you’ll probably know that a good sales funnel can make wonders in terms of ROI.
There are also some very 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 the both models can be very profitable if done right.
What is an affiliate network?
An affiliate network is basically 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 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 a 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 car 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 usually paid a value between 30% to 70%.
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, which is usually a cheap product between $5-$20 and often 30% to 50% through the rest of the products sold within the same funnel (the backend).
These are only a few common commissioning tactics, but as I already mentioned above, the commissions will vary from product to product.
You don’t usually need to pass any kind of phone verification to become an affiliate in an affiliate network and in most of the cases, you don’t even need to have a website.
A few examples of 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 major difference between a CPA network and an affiliate network is that CPA networks choose their affiliates more carefully and unlike the most affiliate networks where you are automatically accepted, in CPA networks, you can have your application rejected if you are a complete newbie and have no previous marketing experience.
To be accepted in CPA networks, you will also need to provide more details on how you are going to promote their offers and what’s your previous marketing experience.
Usually, the CPA networks don’t accept people who are total beginners in internet marketing and some networks will also require a phone interview before accepting your application.
The CPA networks have stricter rules than the affiliate networks because the advertisers will usually require specific traffic sources, only traffic from specific countries, and so on.
Because these offers are paying for leads, zip submit, free registration or trials instead of only paying for sales like the simple affiliate networks, these will predispose the networks to cheat attempts from their members.
That’s the main reason why these CPA networks are pickier in choosing their affiliates.
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.
Some of the CPA networks will focus on the promotion of incentive offers, mobile offers, or around a specific niche, while others are more general.
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 to a specific offer, etc. It’s in their interest to help you, because the more money you make, the more money they make.
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 only requires a lead, 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 also be part of a funnel and you are usually paid a commission throughout the whole funnel, while this is not the case for the CPA offers.
Allowed traffic generation methods
While you can use almost any traffic source to promote the offers from affiliate networks, when you promote CPA offers, your promotion methods are usually limited and chosen by the publisher.
The quality of the offers
A lot of the CPA offers are simply junk and scams and sometimes the vendors do not pay. Therefore, sometimes, it can be very hard to find a good CPA offer that deserves promoted.
There are also a lot of low-quality offers listed to the affiliate networks, but I would still give the affiliate networks a plus when it comes to comparing the quality of the offers.
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 from affiliate networks, you will face refunds and chargebacks and sometimes you won’t be paid until the product’s money back period has expired.
Getting accepted to networks
When you apply to become an affiliate for an affiliate network, you will usually get your account approved instantly.
When you apply for a CPA network, you will usually need to get your account manually approved by an affiliate manager. Sometimes they will require a phone interview, additional details on how you’re going to promote their offers and 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).
A disadvantage of CPA is that the CPA offers, especially the offers which doesn’t require a sale, will be often removed without 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.
The offers found on the affiliate networks will usually be available for a longer time.
Regardless the 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 own 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 limitations as when it comes to the promotion of the CPA offers.