Cost per action is a form of ppc advertising where the payment to the publisher depends on the action that the user takes. Depending on the reaction of the user after seeing the ad, the payment to a particular ad is decided. This form of ppc advertising is commonly referred to as CPA model. it is also known as pay per action model.
The ppc advertising is a popular concept these days. The advertiser selects a popular website where he wants to get his ads get published. This site selected by the advertiser to do his pay per click advertising is supposed to be the one that has high traffic. This gives the advertiser a better chance for exposure. In ppc advertising, the advertiser does not have to pay anything initially just to display his ad. If at all the user performs some action on that ad or after seeing that ad, only then is the advertiser liable to pay the publisher.
Whenever a user sees website advertising, he can perform various actions. The user can simply ignore the ad and click the back button. In that case, the publisher does not get anything. The user can click on the ads if he is interested. In that case, in ppc advertising model, the advertiser has to pay the publisher because it is via his site that has attracted the users. The payment is made depending on the number of times a particular action was taken. Hence this model of ppc advertising is referred to as cost per action.
There are many actions that a user can take in an online advertising model such as ppc advertising in which case the advertiser is liable to pay to the website publisher. The user can fill up the enquiry form. This gesture of the user suggests that he is really interested in the products or services provided by the advertiser. In this model of website marketing, the user can sign up for news letters or information emails. This makes it easier for the advertiser to reach the target audience. The user can even ask for a follow up call. The advertiser can even generate sales from his ppc advertising. This is the best thing that can happen to the advertiser.
The advertiser has to pay depending on the actions taken by user. The magnitude of payment in this ppc advertising model will also depend on the actions taken. If the action taken by the user is like signing up newsletter, the pay scale would be less as compared to if the website has generated sales for the advertiser using ppc advertising.
The advantage of CPA ppc advertising is that you have to play only if you have positive results for your website. Thus, you are paying only if you get an access to potential clients. This is the reason why CPA ppc advertising is a preferred model by many advertisers who are opting for ppc advertising.