CPA in Marketing: What It Is and How to Calculate

CPA is an ambiguous term, which can refer to:

• CPA-marketing — a synonym for affiliate marketing, which is a way of promoting products or services online
• Cost Per Action — a payout model in CPA marketing, akin to RevShare
• Cost Per Acquisition — a metric in CPA marketing, which is especially important when using the CPA model; it indicates the marginal cost of acquiring a lead

Let’s talk about them all and answer some commonly asked questions:

• What is CPA?
• What does the CPA formula look like?
• How to calculate CPA?
• How does CPA in marketing work?

Specifics of CPA

Let’s begin with the most commonly used definition of CPA as a payout model. Together with RevShare, Cost Per Action forms the foundation of CPA marketing, from which an affiliate earns a commission for promoting some goods or services.

RevShare provides a percentage of the advertiser’s Gross Gaming Revenue (GGR), while CPA offers a fixed commission, no matter how much the player bets.

	CPA ($200)	CPA ($200)	RevShare (20%)
Player bets in total	$100	$10,000	$100
Affiliate’s payout	$200	$200	$20

Payouts for a target action have their ups and downs. That is why affiliates might wonder at times: RevShare or CPA?

Advantages

On the bright side, CPA offers a few undeniable pros:

• ✅ Predictability of payout amount, which is helpful to plan out your budget
• ✅ Quicker ROI, as even complex target actions, e.g., making a deposit, pay back faster than RevShare
• ✅ Guaranteed payout no matter what, provided all the KPIs are met
• ✅ Simpler accounting, which is especially the case for large media buying teams

Disadvantages

However, CPA is not without its cons:

• ❌ Payouts are made for new users only, hindering passive income opportunities
• ❌ High cost of missed opportunity if the player is a high roller
• ❌ Since the incentives of the advertiser and affiliate are not perfectly aligned, there is a risk of a conflict, when the affiliate might try to score the target action no matter what

How to Calculate CPA

“CPA how to calculate?” is one of the most common questions we receive. Remember that CPA is an ambiguous term. There is also such a thing as the CPA metric, indicating how much it costs to acquire a new lead, hence the name — Cost Per Acquisition.

Sometimes, affiliates refer to this metric as Cost Per Action, but in order not to confuse you, we decided not to mix up the definitions. We’re not here to make a fuss over definition accuracy, though; we’re here to answer: how to calculate CPA?

The CPA formula looks as follows:

• Ad spend / number of target actions = cost of acquisition (or the cost of said action)

Let’s say there is an affiliate who spends $1,000 on an ad campaign, with a First Time Deposit (FTD) being the target action. Among all the leads acquired, 100 topped up their accounts. Therefore:

• $1,000 / 100 = $10 — this will be the marginal cost of acquiring a new lead

Sometimes, though, the number of target actions might be unknown. Thankfully, with the help of Impressions and CTR, we can still learn what the CPA value is.

Assume an affiliate launched a campaign that generated 500,000 impressions. It had a click-through rate of 4%. Of all the landed users, 2% were converted. The campaign had a total budget of $5,000.

To learn CPA, we need to figure out the number of clicks, first, and then the number of target actions.

• Clicks: 0.04 * (500,000) = 20,000
• Target actions: 0.02 * (20,000) = 400
• Cost: $5,000 / 400 = $12.5

Alternatively, you can also use a dedicated online calculator to learn your particular CPA.

Target Actions Diversity

In the case of PIN-UP Partners, the target action boils down to players making FTDs. However, other affiliate programs or networks can have alternative target actions.

The thing is, CPA is an umbrella term for various target actions, or desirable outcomes for advertisers.

• Cost Per Lead — the user has to confirm their identity via a phone call, message, or feedback
  • Single Opt-In — a registration without confirmation will suffice
  • Double Opt-In — it involves registration, which requires email confirmation
• Cost Per Sale/ Order — unlike CPL, if the user requests a refund, it busts the conversion.
• Cost Per Install — the user has to install an app, utility, or software
• Cost Per View — great for brand awareness, when users are required to watch a video

Depending on the advertiser’s preferences, the target action can be anything: adding an item to the cart, ordering a phone call, downloading a file, subscribing to a service, or making a deposit — which is our case.

Please note! CPA and bidding models are two separate things. In this regard, Cost Per Mille (CPM) and Cost Per Click (CPC) are the metrics used by website owners and ad networks. To keep things clear, let’s recap how CPA marketing works.

How CPA Marketing Works

Affiliate marketing involves three integral elements:

• Advertiser (product owner)
• Affiliate (depending on the context, publisher or advertiser)
• Source of traffic (a website, app, Google, Facebook, ASO, etc.)

The affiliate opts to promote the advertiser’s product. Any website, platform, or app running the ads is a traffic source. The user’s click on the ad, which leads to the advertiser’s website, will earn the affiliate a commission, provided the target action is achieved, and the KPIs are met.

How CPA Networks Function

The CPA network connects affiliates and advertisers. However, the affiliate program, e.g., PIN-UP Partners, does the same, so what’s the difference? Affiliate programs typically have fewer offers, but they all are direct and exclusive.

• Affiliate picks an offer from PIN-UP Partners;
• Goes to an ad platform (a website, app, or social media);
• Launches CPA ads and, hopefully, acquires new leads;
• Gets payouts from PIN-UP Partners, provided the KPIs are met;

Two particular currents make this whole flow possible: money and traffic. As long as the affiliate generates new users, PIN-UP Partners pays commissions for CPA.

Working with an affiliate program  is convenient because the affiliate can get paid twice a month or upon request with little-to-no limitation on how much. Our managers will help to optimize your funnels, share their expertise, and reveal the latest trends to ease your honest money-making efforts.

How to Choose an Affiliate Program

In CPA marketing, you can work with an advertiser either directly or via an affiliate program, or affiliate network. You don’t have to limit yourself to a single network and can have many of them in reserve. However, make sure the affiliate program plays fair and helps you in your work. Whenever choosing one, consider this:

• Reasonable payout amount — the most is not always the best, as suspiciously high payout rates can indicate shaving or impossible KPIs; conversion rate is a more robust indicator in this regard
• Specialization — affiliate networks can specialize in multiple verticals or go in-depth by focusing on 1–2 niches
• Availability of promo materials — it includes landings, creatives, and similar items
• Efforts put into verifying affiliates — test campaigns exist to prevent all parties from financial losses, so rigorous checking is not actually a bad thing
• Ease of use — the dashboard ought to be convenient and accessible, so that you can focus on work
• Quality and responsiveness of support — the affiliate network’s mission is to help you earn money; the faster their managers work — the less money you lose on waiting
• Diversity of payment system providers — the more, the merrier; pay close attention if crypto payments are available
• Positive feedback — reviews from affiliates are the best form of advertising, which is why you should look for such info online

PIN-UP Partners provides it all and even more. Fair terms and conditions for CPA, RevShare, RevShare+, and Hybrid, direct offers, experienced and amiable managers, lots of consumables, and payouts semimonthly or upon request — we cherish our partners’ comfort above anything else. Register now and make money without problems.

Tips on How to Use CPA Efficiently

CPA is a default payout model in affiliate marketing. Moreover, partners are so accustomed to this model that they might feel reluctant to try out RevShare, even in situations when the latter is more beneficial.

CPA delivers a quicker return on investment (ROI), so you can start spending money on other sources faster as well. The model simplifies budget planning, but the long-term income will be lower, compared to RevShare.

When working with Cost Per Action (CPA), the payout rate should exceed the cost of acquiring the First Time Deposit (FTD). Otherwise, you’re guaranteed to start losing money. The payout rate is not the only factor, affecting your Cost Per Acquisition (CPA); others are:

• Conversion rate
• Selected Tier and GEO
• Preferences of the target audience
• Active hours of the campaign
• Quality of creatives and landing pages
• Targeting settings
• Functional tracker and analytics
• Competition in the market

That’s why regular tests are so important, even when the campaign is up and running and making a profit. A/B testing helps to figure out the best creatives and other funnel elements. Data-driven optimization helps you to lower your Cost Per Acquisition (CPA). The lower the cost of acquisition — the bigger the income.

Besides, you can use spy tools to monitor industry trends and adapt your creatives according to the audience’s preferences before launching a campaign.

When working with iGaming products, consider using pre-landers. Consider warming up the user on yet another spin-the-wheel game to engage them better, so that you can raise your probability of conversion.

How to Start Working by CPA with PIN-UP Partners

First things first, go to the official site of PIN-UP Partners and press one of three big red buttons.

Next, the registration window should pop up, where you need to input your name, email, phone number, preferred messenger, and password of your choice. In about half an hour, you will be contacted by one of our representatives, unless the registration takes place after business hours.

By default, you are able to choose RevShare alone. To unlock CPA, or any other model in that regard, you will have to contact your account manager and talk through the details of the future campaign. For instance, you will need to elaborate on the traffic sources and provide your campaign statistics. Depending on the affiliate’s experience and some other factors, the CPA rate will range from $25 to $150. Nonetheless, the most experienced professionals can expect individual rates for their services.

On your dashboard, you should be able to find a tab to create a new campaign. Follow the algorithm:

• Discuss with your manager the terms and conditions for CPA, and if you’re successful…
• Start making a new campaign
• Pick a CPA offer
• Select the campaign/ promo type
• Choose the language and traffic source preferred
• Get the link
• Set up postclicks (SubID) for tracking (your account manager should help)
• Look for a new link in the “My Promo” section
• Contact the manager and learn the requirements for your test run

In case CPA negotiations fail, you can always launch a RevShare campaign instead. We had a peculiar case when the affiliate requested a rate that we couldn’t provide at the time. To keep everyone happy, our manager suggested trying out RevShare. In less than a year, the affiliate earned more than they would while using CPA. That’s why your payout model doesn’t make much of a difference, as PIN-UP Partners will do their best to keep your ROI positive.

All of our promos are localized, including creatives, banners, landings, etc. On top of that, we have apps to work with Google UAC, Facebook, and TikTok. Additionally, you can ask your account manager for custom promos if you are looking for a tailored approach.

Discuss all the campaign-related details with your manager last time before setting sail for some profitable campaigns with PIN-UP Partners!

FAQ

In this section, you will find the answers to some of the most commonly asked questions, concerning CPA.

What makes CPA different from CPL

Cost Per Action (CPA) is a wider term, which includes Cost Per Lead as its subset. CPL conversion is registered only after confirming the lead’s identity, while for CPA this condition might be irrelevant or insufficient.

What is CPA in affiliate marketing

CPA is an ambiguous term in affiliate marketing, having at least three definitions: CPA marketing — an alternative term for affiliate marketing, Cost Per Action — a payout model for affiliates with a fixed rate, Cost Per Acquisition — a metric, indicating how much you need to spend to acquire one more lead.

All three terms are closely related, despite their distinct definitions.

How to monitor and analyze CPA earnings on PIN-UP Partners

Find all the campaign-related info, including CPA earnings, in our dashboard. You’ll find both general and detailed info on players, promo, referrals, and other stats, including cohort analysis and finances. For better accountability, there are multiple filters and a sorting option. You can also access support from there.

We encourage you to keep in touch with your account manager to find the patterns in users’ behavior and optimize the campaigns better. They say two heads are better than one for a reason.