Cost Per Action (CPA)

What is Cost Per Action?

Cost per action, also known as CPA, is a pricing model, wherein marketers pay publishers, advertising networks, and/or other media entities for the specific actions that prospective customers take, rather than the impressions or clicks said media entities generate.

To participate in CPA marketing, marketers choose a pre-specified action. Marketers then only pay media entities when prospective customers complete said action.

An app marketer, for example, might create a CPA campaign to generate new app installs. In this scenario, “app installs” would be the pre-specified action. The media entity the marketer partners with would then run the marketers campaign. Finally, the marketer would pay the media entity for the app installs the campaign generated, but not the impressions or clicks.

CPA Formula

To calculate CPA, use this formula: Advertising Cost / Number of Actions = CPA

CPA Campaigns

Cost Per Action (CPA) is one of four pricing models available to mobile marketers. The other three are Cost Per Mille (CPM), Cost Per Click (CPC) and Cost Per Install (CPI).

CPA campaigns can benefit both marketers and the media entities they partner with. Marketers only pay for results, which help them grow their companies. And media entities are able to work with marketers who would otherwise be hesitant to engage in paid campaigns.

That said, CPA campaigns are rarely offered by ad networks.