The cost-per-acquisition model (CPA) provides advertisers with a guaranteed way to ensure ad efficiency, while also opening the door for social networks to monetize more of their traffic.
The benefit of CPA for advertisers
The CPA model is ideal for social networking sites because it eliminates virtually all the risk for advertisers of buying on a CPM basis. As a performance-based model, advertisers pay a fee only for the results their CPA campaign generates. That result can be any transaction specified by the advertiser. For example, an advertiser places a CPA campaign on ESPN.com. Rather than paying for all the people who see that ad, the advertiser only pays the publisher for each user that not only clicks on the ad but also follows through and completes the desired action as defined by the advertiser -- anything from an email submit or qualified lead to a sale or paid membership.
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