For tracking the effectiveness of a campaign, most businesses consider the statistics revealed by CPM and CPC. The only fact that they fail to consider is that for most of the businesses, the impressions and clicks hardly help you in earning money. So by relying on these, you might not exactly be tracking your ROI. The same goes for page stats as well. Impressions, clicks, page views, etc. are not an end itself; they are, in fact, just means to an end. If they don‟t result in more sales, all expenses spent on them are useless. If you earn money from the sales, you need to correlate the costs and sales. So you need to measure the Cost per Action [CPA].
In a CPA campaign, an advertisement is run online on a third-party website, who generally charge commission if you can get sales through that ad. So it is purely based on performance. It entirely means that the risk lies with the publisher as he would get a commission only if the views are converted into sales. Affiliate marketing is the most widely used CPA strategy. It will help you in determining what kind of actions will reward you and how much you would be willing to pay for each action. Like, if you engage a third-party site for sales promotion, they can get a commission only if sales are generated by them. The CPA in such a case would be the cost for every lead generated, or simply the cost per sale.
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