The biggest mistake most affiliates make is it’s not about clicks, page views or impressions it’s about conversion. Return on investment (ROI) is the key to being successful at CPA affiliate marketing.
The Formula for measuring CPA is by dividing the total cost per advertising campaign by the total number of actions (conversions) that were received from each ad campaign. For example, if your online ad campaign costs $1,000 and generates 50 sales or leads, your cost per action (CPA) is $20.00 each
Most affiliates get confused by a different offers and payouts by the advertisers. There are three main types of offers – free-trial offers, zip-submit offers, and e-mail-submit offers. I will attempt to explain all three offers and their different payouts. The main thing to remember is the more options or fields at your prospect has to enter the lower the conversion on that offer. (ie. Zip submits are only one field while free trial offers may have multiple fields, but higher payouts)
Free-trial offers: These free trial offers are frequently totally free to the consumer, excepting a small fee ( as little as $1.95 or so ) for shipping and handling. The customer gets a product they’re interested for an incredibly low price, and the advertiser gets a valuable lead.
Many times the advertisers are willing to pay out as much as $20-$100 per lead . The advertiser will more than make up for this because a lot of times they are enrolled in a continuity or auto ship program.
And the great thing about these offers is that you don’t have to worry about the shipping or fulfillment of the product nor do you have to worry about optimizing the webpage for conversion it’s all done by the advertiser and you still get paid.
A second type of offer is a zip submit and all you have to do is get the visitor to leave their zip code to get access to some information may be to a coupon or some kind of free trial offer.
A lot of times the advertisers are willing to pay as much as a dollar per zip code submitted. And typically you can make up for the low payouts by the high conversion rate of these webpages.
And a third type of offer is called an e-mail submit. Typically people a little more leery about leaving their e-mail address on a website so these do convert at lower rates than zip submits. Typically these type of offers are used to build e-mail lists that the advertiser will later send more offers to, therefore they’re willing to pay higher payouts upfront because they will make their money on the back end. (Payouts could be as much is $2-$5)
I want to interject a little term called arbitrage. Let’s say you paid $.25 a click to get someone to the CPA offer pages. And it converted ads 5% at $20 out of a thousand clicks. So, 50 sales at $20 = $1000 – $250 cost of clicks = $750 ROI.
Here’s tool to track your ROI automatically it is called Stats Junky. This tool will save you hours of time and money too. It will help you turn your break even campaign into a high profit one.
