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Difference Between CPC and CPA

advertising_bookCPC vs. CPA

Internet advertising and online generating revenues are good endeavors to follow, in this technologically restructured world. This is the reason why, Google ‘“ the biggest online giant ‘“ became what it is today. Through smart advertising mechanisms, many online publishers, and even vendors, have become self-made millionaires. Both groups use the advantages of the CPC and CPA system, but how do these two mechanisms differ?

CPC stands for cost per click. As the name implies, it is basically the cost of something (like a banner advertisement) whenever a click is made. This is one of the proven and tested mechanisms that Google Adsense has used for many years. The downside of this strategy, is that it is very hard for web masters or publishers to gain much money from their websites with just plain CPC, because they really can’t dictate when their visitors will make a click on those Google ads. Much more, these ads are usually priced at the cents level per click. This makes CPC quite cheap. All in all, it is very difficult to gain much income from CPC if you don’t have regular, and humongous traffic to your domain. To be exact, it is said that 50% of your regular visitors must click on your ads for you to really make a big and steady profit.

So what then is the so-called CPA? CPA is simply cost per action. After Adsense, this marketing scheme has started to become very popular. From its name, CPA gives the web publisher a chunk of the income. This is very different to CPC, in the sense that the potential income depends on the action done, or simply on how many sales were made, and, in turn, how much commission was generated from those sales. For example, if Microsoft were to have a CPA operandi that offered 3% of the sale of their product (the action), the publisher will gain 3% of the cost of each product as commission, after the sale has been closed.

In general, this model offers lower risks. CPA has a bigger potential income if there are lots of sales made. Web administers can also play an affiliate role by using or merging ads with the content of their pages. Hence, whenever a visitor clicks through those creatively written text links (with a unique affiliate ID of the web site owner), there is the potential to earn from that visitor if ever he or she closes a sale from the site to which you have redirected him or her.

1. CPC generates income on a ‘click’ basis of the ads, whereas CPA generates income on an ‘action’ basis, for example, when a sale is made.

2. CPC is difficult to achieve unless you have huge traffic to your site, whereas CPA is a less risky strategy because you can easily make many affiliate links to other product selling sites.

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