Five considerations for publishers with pay-per-lead advertising
As a publisher, you have several different ad pricing options available to you on your website. Choosing which one will be the most lucrative and profitable can be a tough task, and it is often found by trial and error, especially for a new website. Websites that pull in a lot of visitors may find that pay-per-view CPM ads are the way to go, while pay-per-click CPC ads are best used on sites with a very active and receptive audience. If CPC ads work for you, you might consider conversion-based ads, which are suitable for certain sites and audience. Cost-per-action, or CPA, ads are ads that pay the site owner whenever a lead, order or purchase comes from an ad followed through their website. If you are thinking of going this route, let’s look at some things you should know beforehand.
Advertisers love CPA ads, as they only have to pay out when a sale is made, which essentially guarantees a positive ROI. The same guarantees are not in place for the publisher, as it’s impossible to know beforehand just how much will be generated by running these types of ads. You can make guaranteed money with CPM ads, but nothing with CPA, even when the ads display many thousands of times and are clicked on many times.
Problems with purchase verification
Your CPA-based earnings are very much in the hands of the advertisers because the conversion tracking is often performed on their sites. Since CPM and CPC ads are easy to track by your ad server, it is simple to check and verify the payments from the advertiser. On the other hand, sales, leads, purchases, subscriptions and orders are more difficult to track and verify without a comprehensive agreement on ad tracking and ad reporting with the advertiser. It’s not impossible but you need a good ad server
with conversion tracking support.
Unclear definition of a conversion
When a lead is truly a lead? With CPA ads, the advertiser will only pay per lead generated from ads placed on your website. It sounds fair enough. However, if your agreement with the advertiser is vague, it may raise the question about the validity of those leads. A conversion can be different things to different people. It can be a new newsletter subscriber, a purchase order, a trial registration, or a new paid membership. Be prepared to be specific and clear in the ad contract and ad tracking approach, or be ready to deal with reporting discrepancies.
Setting a high CPA rate
One way to cover your bases when it comes to unknown factors is to set a high CPA ad rate. The rate that you choose will be dependent upon a number of factors, with the industry that you are involved in playing a major role. If the advertisers on your site are selling high ticket items, then it stands to reason that you should get a nice share of the sales generated by leads from your site.
Figuring out your CPA rate
If you are not sure what to charge for your CPA rate, you might want to suggest the advertisers to start with a CPM or CPC campaign first, as this will give you an insight into how your visitors will react to the ads being shown. If you get a high click-through rate, then you can really consider going with pay-per-lead.