Cost Per Action (CPA) is a pricing model in digital advertising where advertisers only pay when a specific action is completed by a user. An “action” could mean anything valuable to the advertiser, such as a purchase, sign-up, app download, or another type of interaction. CPA allows advertisers to focus their budget on results rather than clicks or impressions.
How CPA Works
With CPA, advertisers define a specific action they want users to complete. They then set a CPA bid, which is the maximum amount they’re willing to pay for each action. The advertiser is only charged when a user performs the defined action, helping control ad spend and focus on meaningful outcomes.
Common Actions in CPA Campaigns
CPA campaigns can be tailored to different goals. Common actions include:
- Purchases: Paying only when a user completes a purchase.
- Sign-Ups: Paying when users fill out a form or register.
- App Installs: Paying when users download and open an app.
- Other Conversions: Depending on business goals, actions might include video views, free trial sign-ups, or other valuable interactions.
Benefits of CPA
- Better Budget Control
CPA helps businesses control spending by focusing payments only on completed actions, making ad spend more efficient. - Goal-Oriented Advertising
Since advertisers only pay for specific actions, they can align campaigns with precise business objectives, such as gaining new subscribers or boosting sales. - Higher Return on Investment (ROI)
By focusing on actions that drive value, CPA can improve return on investment, as advertisers are only paying for completed, measurable outcomes.
CPA vs. Other Pricing Models
| Pricing Model | Description |
| CPA (Cost Per Action) | Pay only when a user completes a defined action. |
| CPC (Cost Per Click) | Pay each time a user clicks on an ad. |
| CPM (Cost Per Mille) | Pay per 1,000 ad views (impressions). |
How to Start with CPA
- Define the Action: Determine what action is most valuable for your business, such as purchases or registrations.
- Set a Target CPA Bid: Choose the maximum amount you’re willing to pay for each action.
- Track Conversions: Use tools to monitor and measure conversions, ensuring that each action is accurately counted.
- Optimize Campaigns: Review performance data and adjust bids or ad strategies to improve CPA efficiency.
Cost Per Action (CPA) is an advertising model that charges only when users complete a specific action. CPA campaigns help advertisers reach their goals more efficiently by focusing budget on meaningful results, like purchases or sign-ups, making it a powerful option for performance-focused advertising.