Selling Ads On A CPA Basis

When should I be selling ads on a CPA basis?

The simple answer is: when you have spare space on your site and it’s a good advertiser.

A CPA deal is generally a great deal for the advertiser, but it can work out good for you too if you have space on your site you can’t sell.

Most ad networks struggle to get a 100% fill rate, so if you have inventory on your site which is making little-to-no money then it can be a good idea to have a CPA campaign or two on your site.

It really depends on the advertiser and your ability to optimise campaigns. In a lot of cases, if the advertiser is a big company, then it’s not exactly hurting you to show their ad on your site a lot and hopes someone buys something from it.

 

Calculator IconWork out the Cost per Acquisition of your campaigns with our CPA Calculator >

 

How do I run a CPA campaign?

The first thing to keep in mind is that with a CPA campaign, more than other types of campaign, you really are in it together with the advertiser. They want you to sell as much as possible using as few impressions as possible, which is exactly what you want. Therefore you want to set up a CPA campaign correctly from the start, and that means getting a conversion pixel in place.

A conversion pixel is a piece of code you can generate from your ad server, which means that you will be able to see conversion data the same way you can see clicks in your ad server and optimise accordingly. You will need to send this to the advertiser and ask them to place it on their sales confirmation page (the webpage on their site which appears immediately after the sale has taken place).

If they are unwilling to do this, then you are basically unable to optimise the campaign towards conversions, and the campaign becomes a shot in the dark (it may still be worth trying, but you should keep an eye on the eCPM, and cut it short if it’s not). You can, of course, optimise the CTR, but strangely clicks and conversions do not seem to line up in many cases.

Note: When setting up your conversion pixel, make sure that you enter the agreed-upon post-click and post-impression windows so you can optimise accordingly.

If you have the ability and know-how to add pixels, add an exclusion pixel to the confirmation page too so you don’t keep serving the ad to users who have already converted.

It is also always useful to get reports from the advertiser. The conversions you record on your system will not line up with theirs, as some will be attributed to other websites. You, therefore, want to keep an eye on whether you are earning as much as you think you are from a campaign. It’s also nice to be able to compare yourself to other sites to see if you are actually performing well – some advertisers will provide this information, some won’t, but it doesn’t hurt to ask!

As for serving the ads, this is where it gets a bit tricky. If you are working on post-click and post-conversion windows, what you want is to make sure that your ad is the last that is seen/clicked on by a user before they purchase. Therefore you want to try and make the ad be seen multiple times within their journey through your site.

Depending on the quality of the ad, this could mean that you show the ad to a user on the first page they visit, for which it would make sense to use one of your least successful ad units (likely the skyscraper). Make sure it only appears once per session by setting a frequency cap of 1/24 hours.

After that, it should appear once again before any other remnant networks you have going, and then leave it to mop up all your final unsold impressions. If you have multiple CPA campaigns running, they essentially make up a remnant network of your own – just try and set them so you always have ads from different advertisers appear together.

 

Top Tip

There is also a slightly dodgy tactic of using a below the fold ad to run the ad a lot in, so as to continuously ensure you are dropping cookies on your users’ computers, but this is pretty dishonest.

A less dishonest version of this would be to run a 120×60 or 125×125 button ad above the fold on every page to keep those cookies dropping. This becomes more of a co-branding exercise though, as the advertiser’s message will appear all over your site.

You should, therefore, make sure that 1) The advertiser’s brand is compatible with your own (ie your users will look kindly upon seeing their branding) and 2) That the advertiser is happy with such an arrangement.

 

CPA Formula

The equation for CPA ads is:

CPA Equation (or Cost Per Acquisition Equation)Click to enlarge

CPA = Ad Spend ÷ Conversions

 

Optimising CPA campaigns

CPA campaigns need to be optimised a bit differently to other campaigns as conversions occur so much less frequently than clicks. There are two things you can optimise towards – more conversions, or a better eCPM.

If you are just filling empty space, then optimise towards conversions. It’s easy enough – wherever you get most conversions, make the ads appear there more.

If the CPA campaign is competing with other campaigns, and/or you want to improve the eCPM, this is what we would recommend in terms of optimising:

  1. Run the campaign for at least a week to get some baseline results (preferably a month, but see what the advertiser allows).
  2. If you have got a reasonable amount of conversions, work out the average number of impressions it takes to get a conversion (impressions on that campaign divided by conversions).
  3. Any placement which has served more than that amount without getting a conversion, stop running the ad there, and run the ad everywhere that does better than that more often. Any placement which hasn’t delivered the average amount of impressions needed in total, just ignore.
  4. Repeat the above stages weekly, but only running reports for the last 30 days each time. This is to ensure that you are keeping sales trends in mind when optimising.
  5. Every 3 months, do steps 2 & 3 but use “all-time” as the timeframe and optimise according to that. This will reinvigorate the whole process by switching on something which had been switched off, as well as finally judging the placements which weren’t getting enough impressions on a monthly basis.

While this process is going, you need to note the following:

  • After the first month, keep an eye on the eCPM and make sure it is worth you running this campaign. You are indirectly optimising eCPM, so this should improve over time.
  • In step 2 the “reasonable amount of conversions” varies from campaign to campaign. Depending on the situation you may be able to ask the advertiser about your performance so far.
  • Placements can mean different things depending on which ad server you are using, but it basically means some combination of ad and page. It’s a good rule of thumb to say anything that has served more than 1,000 impressions in 30 days is worth judging on it’s own. This means that if your site is big enough, instead of judging ad units or pages as a whole. You should judge the ad units only on those specific pages (for example switching an MPU on or off on the homepage only).

 

What CPA price should I accept?

The CPA price is essentially irrelevant to you when choosing to accept a deal or not. Until you run the campaign, do your best to optimise it and then work out the eCPM, it’s impossible to compare it to your other campaigns. A campaign with a low CPA may sell great on your site, and earn a great eCPM, but then a high CPA campaign may sell nothing and so be worthless to you.

It is therefore entirely a judgement call. If you have unsold space on your site, in most cases you should probably give it a go.

If you are considering cramming it into an otherwise full site, judge each campaign based on:

  • The quality of the ad – will they make your users think more of your site than whatever they are replacing
  • The helpfulness of the advertiser – can you put conversion cookies on their site? Will they send you reports? Are the conversion windows reasonable? If they aren’t helpful then it’s going to be hard to get a lot out of the campaign.

 

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