CPC or CPA affiliate marketing model? Both!
Google expansions into cost-per-action (CPA) payment model in conjunction with its traditional cost-per-click (CPC) business demonstrates the increasing importance of the CPA model. Merchants like CPA model and want more responsibility from their affiliates. The affiliate marketing sector, which pays out on a CPA, has been one of the fastest-growing online segments for the past few years. However, concerns that Google’s move presents a danger to the traditional affiliate marketing industry are groundless.
Google’s approach to advertising has always been a much-automated one. The AdSense product, to which the CPA model will first be applied, was very much meant to be a ‘plug-and-play’ solution to affiliates to monetize their sites. And while the CPA payment model will allow merchants only to pay out if someone comes to their site and buys, it will do nothing to actually tell them how to improve their conversion or site performance. For example, affiliates do not need a big flashy CPA, if it's not converted into proper earnings. If merchant's site doesn’t convert it won’t matter how high the CPA is.
Affiliate marketing today take a very different approach. Communication between merchants and affiliates provides better understanding to affiliates of the merchants' products. In addition, affiliates get customized creative, up-to-date product information. Most affiliates that already participate in the industry today have grown significantly in terms of sophistication and variety. A typical marketing campaign will see traffic driven from PPC affiliates, SEO affiliates, content sites, reward sites, shopping comparison engines, email marketers and more.
Nowadays affiliates have more choice than ever when it comes to where they send their traffic, and it is not just limited to CPA-based models. More and more affiliates are comparing the returns available from contextual advertising options such as Google Adsense to those available through CPA models. Moreover, it's becoming more popular to provide affiliates with a CPC rate for all traffic sent and a CPA. Under this model the merchant shares more of the risk in terms of their site converting by guaranteeing the affiliate income on the click, and an advanced reward to affiliates if their traffic converts to sales.
