CPA Marketing Dictionary

April 13, 2012 by: Mahmoud Selman

cpa marketing dictionaryOne of the important things to know before you start promoting another person’s product (or looking for people to promote your product) is to understand the lingo used in affiliate marketing and CPA Networks.

Below is a list of the most common terms associated with the CPA industry…

Advertiser Can also be called a merchant, retailer, eretailer, online retailer, etc. This is the website that SELLS the product or service. They will also process the payment and fulfill the order.

Publisher Can also be called the affiliate, partner, associate, or reseller. This is the third party who PROMOTES the product or service in exchange for a commission or other type of compensation.

Pay Per Lead The commission structure where the affiliate is paid a flat fee for each qualified lead (this
is usually achieved by a visitor entering their personal information on an advertiser’s website).

Cost Per Lead (CPL) The amount of money paid per qualified lead.

Pay Per Sale This commission structure can be either a flat fee or a percentage of the revenue generated on the advertiser’s site which was referred by a publisher.

Cost Per Sale (CPS) The amount or percentage paid per each sale.

Pay Per Click (PPC) The amount or percentage paid for each click that is made on a link, banner or product on an publisher’s website. Many people use search engine payperclick, such as Google Adwords, are called PPC dvertisers.

When you use Google Adsense on your website to generate revenue, you are PPC Publisher.

Cost Per Click (CPC) The amount or percentage paid for each click.
Impression Occurs when a banner, link or product is viewed on a website. The visitor does NOT need to take action (i.e. click the link or banner) for an impression to be registered.

Click Through Rate (CTR) The percentage of clicks made for each impression.

Formula: CTR = 100% x (Clicks/Impressions)

Pay Per Lead, When a visitor registers, signs up or downloads something from an advertiser’s site. This is usually accomplished by a visitor filling out a form on the advertiser’s website.
Cost Per Action (CPA) This is the rate/fee that is set for every action that is taken by on visitor which is promoted by an affiliate.

This usually refers to, by not limited to, Pay Per Lead and Pay Per Sale transactions. CPA, as Cost Per Action usually corresponds to Pay Per Lead while CPA, as Cost Per Acquisition usually corresponds to Pay Per Sale.

Cost Per Thousand Impressions (CPM) This can also be called “Pay Per Impression”. Here, the advertisers pay based on the impressions their link, banner or product is displayed per 1000 views on the publisher’s website.The “M” refers to the Roman Numeral for 1000. Old Google Adwords Site Targeting used to be based on CPM metrics.

 

Earnings Per Click (EPC) This is a metric to measure the effectiveness of being able to turn a click into
commissions.

Formula: EPC = (Clicks/$Commissions Earned)

Effective Earnings Per Click (eEPC) This is very similar to the EPC definition but in this case, if it referring to the effectiveness of being about to turn 1000 clicks into commissions.

Formula: eEPC = (1/1000)*(Clicks/$Commissions Earned) 

As you can see, EPC is an important figure of merit which can predict the effectiveness of selling a certain product but its definition varies by the network. Be sure to read your network’s definitions to understand this further.

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