Very interesting discussion going on over at affiliateboards here:
CPA vs. CPC
What we do as affs when creating websites that sell products and include our affiliate links is called CPA (Cost Per Action). We’re setting ourselves up to earn a commission from each *sale* made. That’s CPA.
What they’re talking about in this thread is building websites or pages geared to CPC (Cost Per Click). Programs such as Google Adsense and BannerBoxes provide advertisements to be displayed on our websites that we earn from whenever a visitor clicks one of those ads. Depending on the topic of our pages and the ads that are displayed, a pretty penny can be earned per click. The trick is to find topics that pay a decent amount.
When we initially look at CPA, we see bigger dollars. Sales of $100 with a 10% commission rate will bring us a commish of $10, that looks a lot more appealing than earning say 10 cents per click. But when we look at the number of clicks it takes before we achieve a sale, and also look at the parasites or theftware that steal our commissions, suddenly the 10 cents per click doesn’t look all that bad.
It takes 100 clicks at 10 cents per to earn $10. Hmmmm. Do you earn $10 for every 100 clicks when doing CPA for each of your merchants?
It’s not hard to find $1 clicks. What about earning $100 for every 100 clicks? Are you achieving that with your CPA product links?
Why not go into one of your aff accounts and run a report for this year. Take a look at the merchants you are sending visitors to and the amount of clicks you are sending their way. Figure out what you’re currently making on an EPC (Earnings Per Click) basis. If you have 1,000 clicks and sales totalling $200, you are currently earning an average of 20 cents per click ($200 / 1000 clicks = .20 cents). Do some investigating and check what adsense or other CPC programs would pay you for clicks on these same pages.
It doesn’t have to be either or, we can keep the merchants that are performing well for us with CPA and paying us a decent CPC. But supplement that with CPC space rather than using less performing merchants as filler. I really am not fond of directing traffic away from a good CPA to a piddly CPC, so this needs to be done with careful consideration.
If you have a nice CPA performing well on its own, no need to offer your visitors a choice between the CPA and some CPC to compete with that. But if you already have that same CPA surrounded by less than stellar performing merchants or products, why not think of a CPC alternative? This really is an area that I need to tap into more.
A big part of the problem is that both the networks and merchants haven’t done enough to ensure their affiliates best interests have been protected and nurtured. For one thing too many have allowed parasites in with full reign. Every time we lose a sale to a parasite, *our* Earnings Per Click drop. So when an opportunity arises for affiliates to earn more by flipping from CPA to CPC without worrying about losing commissions or earnings to parasites, affiliates move on to the better offer.
Also by focusing on CPC, we’re opening ourselves up to an unlimited base of product choices. We’re no longer limited to working with the networks or small indies and driving traffic and sales to the merchants and products within them. We now have clicks going EVERYWHERE, to the small mom and pop shops as well as the bigger name brand stores. All kinds of merchants and product providers use PPC to advertise their wares. We’ll actually be creating a much more varied product base for our visitors to choose from, not just the merchants within CJ, Linkshare, etc.
If affiliates drop CPA and gear their sites to CPC, how will that affect network earnings and parasite earnings? They’ll both feel a bite. But that’s not our concern, as affiliates we need to focus on our bottom line and watch out for our own interests. We’re not here to feed the networks, the merchants or the parasites. It’s time they all realized that, dontcha think?
I wonder if this year will bring great changes as to how affiliates work and drive traffic.
Check out Banner Boxes Here. This is an adsense alternative that pays out at $2 by PayPal. Yup, that’s my aff id I snuck in there. Do with it as you will. 🙂