CPA Marketing, Affiliate Marketing, and the Confusion

CPA Marketing versus Affiliate MarketingWhile I fully understand that the motivation behind this particular article was to generate affiliate sign-ups for one given “CPA network” — and this fact alone makes the endorsement highly subjective — I do feel that it is important for me to address a few misconceptions that this article is spreading. There are at least four major fallacies present in that text.

They are:

Fallacy #1
“CPA marketing” is different from affiliate marketing

CPA stands for cost-per-action. Cost-per-action is basically the very idea behind affiliate marketing as a method of advertising/marketing. It is a type of remuneration that essentially says: I’ll pay you when there is action. The two most widely spread CPA payment models are CPS (cost-per-sale) and CPL (cost-per-lead). The advertiser decides which action to pay for (sale, lead, subscription, etc), and some cases both CPS and CPL models are combined within one affiliate program (e.g.: 10% commission on each sale (CPS), and $0.5 for each newsletter sign-up (CPL).

CPA is the backbone affiliate marketing. It is affiliate marketing. “CPA marketing” = affiliate marketing.

Fallacy #2
“CPA marketing” is what “CPA networks” do.

As I had written elsewhere, a better name for “CPA networks” is sub-affiliate networks. They have contracts with advertisers which agree to pay them a certain amount of money “per action” (normally, “free to the end user” as the article I’m critiquing  points out), which the network, in its turn, redistributes between its affiliates. The network itself acts as one big “affiliate” with multiple sub-affiliates under it. Is the basic marketing model that’s being used any different from traditional affiliate networks (like Commission Junction, LinkShare, ShareASale, etc)? No. It is exactly the same, with the only difference that the “network” acts as your one affiliate. This, in its turn, changes the task of affiliate program management to something significantly narrow than affiliate program management on one of the traditional affiliate networks, but that’s a separate subject.

Fallacy #3
“CPA offers” are more effective.

The author of the CPA Marketing vs Affiliate Marketing article writes:

The reason why CPA is far more effective than promoting affiliates is that often its free to the end user, all you need to do is get them to sign up for a free trial or give their email address or contact details. In return you can get commission of anything up to $40 per sign up (this depends on the product) Affiliate marketing relies on someone ‘buying’ a product in order to get commission which you can imagine is much harder.

Very accurate description, but which of the above really speaks of the effectiveness of this method? It may be great for an affiliate (or a sub-affiliate of a CPA network) who creates a website (or something of the kind), and markets free trial offers to its visitors, getting paid “up to $40” for each free trial/sample requested. But how effective/beneficial is it to the merchants/advertisers that Jill promotes?

Speaking from experience, I’ve had a merchant tell me that they have really wanted to partner with a particular “CPA network”, but because the network has explicitly expressed that they are only in working with merchants who have “free sample” offers (and didn’t care much about this particular merchant’s data feed, or marketing the real product(s)), they had to pass this “opportunity” on.

Fallacy #4
Some “niches” are more profitable (for affiliates) than others.

This simplistic approach is based on one metric only — the payout amount. This may work in some affiliate marketing contexts, but in most cases it won’t. Read my post on 5 C-factors that should influence your choice of an affiliate program, and you’ll see why. That commission or bounty amount may be extremely deceptive.

I could probably write a whole chapter on the topic of “CPA offers” versus traditional affiliate marketing, but I have to mind your time, and stick to the blog’s format too.

When someone makes a claim that that “CPA has become the next biggest rage to make money online”, and it is “a much easier way to get conversions and profit” than affiliate marketing, please understand that this person is (a) wrong on their terminology (the basics), (b) is trying to sell you a get-rich-overnight myth, and (c) may be spreading a number of fallacies. If the spelling mistakes in the above-quoted “article” didn’t turn you off, I hope this post makes you much better prepared to digest the real differences.

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