CPA is a relatively new form of affiliate marketing. Advertisers see CPA as a more viable alternative to the traditional form of affiliate marketing. With AdWords becomingly increasingly more expensive day by day and AdSense revenues dropping, affiliates see Cost Per Action as the modern alternative way to make extra money online.
Traditionally affiliates promote sales and they only get paid if a sale is made. With CPA affiliates can make money online by customer actions. As with normal affiliate marketing the affiliate has to drive traffic to a CPA affiliate offer. Once at an affiliate site however these actions can be anything from signing up to a newsletter, providing an email address, filling out a short form that collects names and addresses or making an affiliate commission for the sale of an affiliate product.
As you can see this has major advantage over normal affiliate marketing as customers are more likely to give up their email details if they do not have to pay any money and traditionally providing leads is far simpler than selling products.
Most companies selling products like to get a foot in the door and this is where CPA benefits the affiliate marketer. Companies will pay handsomely for sales leads; In fact many companies will actually give away their product on a 30 day trial. The customer may just have to pay small handling charge for say $4 or $5 but the affiliate could be paid anything up to $50 for their trouble, which is a great return for a simple trial.
The customer sees it as great deal, they are probably looking to buy a product in any case but pay for just a fraction of the real cost on trial. It is ‘no brainer’ for them. They get their trial and will almost certainly buy over and over again and you have been paid a very high finders fee. In brief you customers are met with a very low cost offer and because they are low cost you should convert more of the offers.
As with traditional affiliate marketing the affiliates get the best results by using the traditional methods of driving traffic (hopefully free traffic) to and affiliate squeeze page and then on to the CPA offer using an embedded hop link. It is only the final part of the process that is different from traditional affiliate marketing. The rewards however and normally much higher.