Differences between CPA and CPL Advertising

Let’s say that you are trying to decide on a new affiliate marketing program.  One advertiser says they pay you CPA (cost per action) and another says they pay CPL (cost per lead).  In cost per lead the advertiser is paying you for each qualified lead or contact that you send their way.  

So let’s say company A is a credit card company, and they will pay you $50 for each person that you get to fill out a contact form on your affiliate website.  The customer must complete and submit this form with valid information for you the affiliate to get paid.  This is an example of CPL.

On the other hand let’s say the second company you look at is company B, a healthcare savings company.  They pay based on CPA which means that you are paid for each person who buys a health care savings plan.

Many companies offer a CPA program to their affiliates because it gets their product or service out in front of a lot of people without having to spend money out of pocket.  Affiliates are paid a percentage of the product or service that they help sell.  The one downside about CPA is that a company cannot always monitor how their products or services are being marketed by their affiliates, whereas with CPL affiliates are only responsible for gathering contacts and leads to turn over to the company.

Which is best from the affiliate’s point of view?  It really depends on what market you are in and how well you do at online marketing.  If you have a good handle on marketing and promoting, the CPA program may be your best shot because commissions could be higher if you are selling a product or service that is in high demand.  However if you are affiliated with a company that gives a large payout for each lead and the information that they are asking for is not extensive, then CPL may be a better way to go.  People don’t mind filling out short forms, but may not complete a longer form unless they are very interested or motivated in some way.  Incomplete forms will probably disqualify you for any commission.

I suggest that you try your hand at both and see which one works best for you.

marykathryn