CPA advertising is one popular way to make sure you are paying for your ads and getting maximum returns on your ad spend. It’s simply another advertising pricing model like CPC, CPM, CPV, CPL, etc. Using a CPA Calculator, you will be able to know how much your ads really cost or will cost before launching your ads.
These pricing models will be discussed more below.
Let’s first look at the CPA formula
What is CPA advertising
CPA advertising or Cost per action is based on pricing per action or paying for only conventions. For example. The advertiser is charged only if a certain action is completed for example. When a customer completes a payment, sign up for a free trial, submit a subscription form, or as we say convert, etc.
It’s different compared to CPC or PPC ad campaigns when an advertiser is charged per click or CPM when the advertiser is charged per 1000 impressions.
CPA marketing is based on conversions regardless of the number of clicks, impressions, or views received during a campaign.
CPA formula
Unlike other types of advertising, CPA or cost per action is calculated by dividing the total cost by the number of conversions OR by dividing the cost of advertising by the number of impressions X click-through rate X Conversion rate.
Example 1: CPA = Cost to an Advertiser / Number of Conversion
Example 2: CPA = Cost to an Advertiser / (Number of impression X CTR X CR)
CPA Calculator
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Other online advertising pricing models
To make those pricing models mentioned above more clear, CPC stands for Cost per click. Thus you pay a certain amount for each click you get during a CPC campaign either with search engines or another advertising network. For example, it can $0.5 per click. Learn more on the CPC calculator page.
CPM stands for cost per 1,000, mille. Thus, you pay a certain amount each time your ads are seen or viewed 1,000 times. For example, it can be $5 per 1,000 views. Learn on the CPM calculator page.
CPV on the other hand works mostly with video ads, the advertiser pays for each view of the video ad. The bid set and the actual CPV on YouTube pre-roll video ads could be a good example of the CPV pricing model.
Conclusion
For many businesses, a CPA ad campaign is the best form of advertising and we made it possible for you to start your CPA campaigns with AdsTargets by simply visiting our home page and signing up as an advertiser.
By using the CPA calculator we provided here, you will be able to fully understand your cost of advertising before and after your campaign and the potential conversions your ad spend has generated.
