effective online advertising: how to pay just for results
TRANSCRIPT
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Effective online advertising: how to pay just for results
www.runcpa.com
It’s a well-known problem in marketing that you never know what result you will get from one campaign to the next
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Sometimes you can spend a lot of money and get almost nothing, sometimes the reverse is true and you achieve great success from actions which cost considerably less.
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Imagine that you could pay only for real, bonafide results. Sounds great, doesn’t it?
But how can you do that?
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All you need is love… and CPA
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CPA stands for Cost Per Acquisition – it’s an online advertising pricing model where the advertiser pays for acquired users
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With the CPA model you know exactly how many customers your campaign will bring in and how much you will pay for them
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How can you get started?
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What is a CPA network?
A CPA network (or affiliate network) is a special platform which acts as an intermediary between traffic owners
and businesses.
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How does a CPA network work?
In CPA networks businesses create their offers (for example, getting new sign-ups) and set the price they are willing to pay (e.g. $20 per sign-up).
Traffic owners are people who want to monetize their traffic and can bring clients to businesses. They take up offers and start sending traffic to these businesses. When they get conversion, they receive money in the form of commission.
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2. You need to understand conversion price
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How to calculate conversion price
To start working with a CPA model you should know how much you are able to pay for a conversion. We suggest you use Customer Lifetime Value (LTV) to estimate an acceptable price for customer acquisitions.LTV is the net profit attributed to the entire future relationship with a customer.
Avg Monthly Revenue per Customer * Gross Margin per Customer in %Monthly Churn rate
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Formula example
• Customer spends $100 per month on average; • Your gross margin is 30% (contribution after
deducting variable expenses including cost of acquisition and cost of goods sold);
• Your churn rate is 10% per month (percentage of customers who end their relationship with you every month).
• Your Customer LTV equals (100 x 30) / 10 = $300.
• You can spend as much as $300 per acquisition, but we suggest keeping it to 1/3 of LTV, ie $100.
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3. You should create an offer on the CPA Network
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What is an offer?
A CPA network offer is a goal you set out to achieve.
Business A: We are willing to pay $100 for a deposit made by new users generated by the CPA network. We want to attract 300 new users.
Business B: We will pay $20 for each sign-up generated by the CPA network.
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How to create an offer
Each CPA network has its own interface for offer creation, but the principle is the same:- You set the goal (sign-up,
subscription, deposit, etc.);- You set the price for the goal;- You place a special code on your site
which tracks conversions from the CPA network.
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4. Start gaining new clients and be happy!
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How does it work?
When your offer is ready, traffic owners will see it in the system, take it up and start bringing traffic to your site.The code you put on the site will count how many conversions you achieved and which traffic owners brought you these conversions. These traffic owners will automatically receive payments for these conversions.
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All in all, by using the CPA model you can effectively use your budget in order to gain real
customers!
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Want to give it a try?
Welcome to RunCPA – an amazing CPA Network guaranteed to bring
you new clients
Register on our website or contact us at [email protected]