Google

Why (or why not) use CPA?

Posted on Dec 24, 2007

CPA (Cost Per Action) is when the publisher of the ad is only paid when the user clicks on the ad and preforms the desired action by the advertiser, which can be anything from purchasing a products to filling out a sign up to a newsletter. CPA ensures that the advertiser get the visitor to their final destination, whereas CPC only ensures that the visitor clicks on the ad. This means that CPA conversion rates will be much less than CPC conversion rates. In this manner CPA advertising is quite beneficial to advertisers because they are guaranteed that a visitor will end at their goal, otherwise no money is paid to the publisher.

With CPA advertising using Google’s Adsense (it is referred to as Referrals), you can actually choose which ads you want to be shown on your website. This means that you are able to select ads that are relevant to your visitors and pick the ones with the highest CPA values. CPA rates range from $0.01 to $153.85. CPA looks like it could be a much better choice than CPC because the higher revenue value and the ability to select what ads you show on your site; however, how much money will you really make with it?

Let’s say that your CTR (Click Through Rate) is ~5% for targeted ad on your website and that your CPC rate is ~$3.00. This means that you will be making ~$150.00 per 1,000 visitors. Now let’s say that you decide to use CPA advertising and that your CTR remains the same. Out of these visitors that click on the ad, how many of them will proceed to do the required action? Let’s assume that 10% of these visitors that click on the ad actually do the specified action. This means that you would need a CPA rate of ~$30.00 to make the same that you do with CPC advertising. In reality the rates of CPA ads are ranges or a low fixed value; for instance, Free File Hosting: $0.23 – 1.19, HDMI Cables: $2.31, or Pay per Click Management: $3.00 – 153.85.  This means that unless the majority of your user’s are ending up on the high side of these rates, that CPC advertising will be the better choice for your website.  Also, it may be beneficial to use CPAlead instead of Google’s Referrals depending on your websites structure.  You really need to experience and look at the logistics before jumping to a conclusion about what advertsing method to useas they all can be used to generate more revenue in certain situations.

Google Adsense vs Alternative Options

Posted on Dec 21, 2007

Unfortunately for me Google’s Adsense did not generate any significant revenue while I used it. Here are the results of about one week’s use:

On the other hand, these are my results while using Direct Media Exchange‘s CPX Interactive as a publisher:

For whatever reason, my site performed quite poorly with Adsense and I made ~250% more profit while using CPX Interactive. Adsense’s ad targeting performed significantly worse than CPX Interactive’s . However, at the current time I am only using CPX Interactive for their eCPM (effective cost per thousand impressions), but I will try out their CPC more extensively in the coming week(s) to gauge their performance with respect to that.

Direct Media Exchange’s setup for choosing advertisers is also preferable to Adsense. You are able to apply to an assortment of advertiser:

• Adtegrity
• Banner Connect Network
• CPX Interactive
• Oridian
• Remix Media (Direct Media Exchange) – Recently closed on 1/31/2010
• Vizi Direct
• Xtend Media

Once accepted by these advertiser, you can choose which one(s) you wish to use. In addition, it is important to decide which will be more beneficial with regards to CPM vs. CPC campaigns.  After testing out each of the advertisers that accepted me for 2 days (1 day CPM and 1 day CPC campaigns) , I decided to use CPX Interactive as they provided the best revenue for both CPC and CPM.

Finding an company that fits your needs can be tricky. You must ask yourself a few questions? Do you want a to run CPM or CPC ads? What options do I have for advertisers (This is highly dependent upon page view per month)? What will be the most profitable in the short run and more importantly the long run? How many ads do I put on each page? To answer most of these questions, you will simply have to do some research and testing to see what works best for you.