As a member of our binary options affiliate program, you provide an important service in driving traffic to our binary options trading sites. Financial affiliate programs provide a means of increasing your monthly income so it’s important to understand the advantages and disadvantages of how you get paid as an affiliate. The two most common forms of payment are cost-per-click (CPC) and cost-per-action (CPA).
A CPC payment method is when a website pays you based on the number of visits. CPC is often used when there is a set daily budget for advertising, so when the budget is reached, the ad is typically removed from rotation for the remainder of the period.
Conversely, a CPA method is an online advertising pricing model where the affiliate program pays for each specified action – typically a sale or registration. The affiliate program will only pay for the ad when the desired action has occurred.
Over the years, there has been a lot of debate about the advantages and disadvantages of both CPC and CPA as well as which is most appropriate for affiliate programs.
CPC is a traditional pricing method that is quite similar to the pay-per-click (PPC) advertising model used for advertisements on many search engines such as Google. On the positive side, this model is easy to administer as it is only based on the clicks performed on an advertising link. However, from an affiliate perspective, it doesn’t reward those affiliates that have driven quality traffic to a site where that traffic then turns into binary trading users. The affiliate that brings in traffic AND converts this traffic into a registration deserves a reward.
Cost-per-action pricing is the most commonly used method in binary options affiliate programs for a number of reasons. For the advertiser, the primary advantage of using a CPA approach is that they are paying not for viewership, but only for those viewers who do something upon seeing an ad. For binary options trading, this typically means an individual clicking on the link and registering as a user. This means that, from the advertiser’s perspective, they are only paying for leads that have converted into new users who will be trading on the platform.
For affiliates, there are a number of other considerations when it comes to CPA. CPA provides the advantage of rewarding those affiliates who are doing what they should be getting paid to do – effectively market their platform to potential users. It rewards those affiliates who have made the decision to develop a partnership with the affiliate program and want to see the binary options platform succeed.
The disadvantage, however, for an affiliate who’s operating under a CPA-driven affiliate program is obviously that they are relying on the advertiser’s ability to turn a click into a sale. That is why it’s so important for affiliates to ensure they sign up to the best financial affiliate program so that their affiliate efforts convert into sales and then income for them.
Under a CPA arrangement, an affiliate would also expect to get a higher compensation since the lead will result in the action desired. With a CPC approach, the advertiser would likely be spending a lot of money into a large number of baskets. This could mean that those affiliates who were driving the most relevant traffic would not be rewarded properly. Again for those affiliates who are performing their role well, CPA is a much more profitable proposition.
The debate around CPC and CPA is ongoing. Since CPA rewards those affiliates who are driving action, affiliates who are geared up for success are sure to benefit now and in the future.