CPA - sounds familiar?

CPA is short for cost-per-action. It essentially gauges actions that are taken by the site visitor that result in a purchase or an equivalent action such as subscribing a newsletter.

CPA is deemed the optimal form of buying online advertising from a direct response advertiser's point of view. An advertiser only pays for the ad when an action has occurred. An action can be a product being purchased, a form being filled, and the likes.

Benefits
* CPA pricing is taken into consideration in any formula that has advertisers paying not for viewership.
* Advertisers often favor such pricing strategies because they pay only for quantifiable results.
* CPA pricing can range from cost-per-click to cost for registration forms filled out, contests entered, questionnaires answered, or cost per ultimate product purchase. And this includes a bunch of other variables alongside a range of steps headed for the sale.

Risks
* Most publishers charge much more for CPA arrangements, with the price going up as the action gets more demanding. This is why cost-per-click is higher than cost-per-impression. The cost for a completed registration form is much higher, and the revenue share or cost-per-sale model is significantly higher still.
* The more a publisher knows about how regular visitors react to a number of calls to action, the better equipped they are to suitably price CPA arrangements.
* CPA pricing is vaguer to any supplier who knows that actual results are as dependent upon what the buyer takes to the transaction, as to what the seller supplies.