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Think You Should Use CPA over CPL? Think Again

Think You Should Use CPA over CPL? Think Again

The multi billion-pound world of online performance marketing (OPM) in which we operate is diversifying by the week, going mobile, or social, or programmatic. 

Underpinning the channels, strategies and approach, however, is the need to both consider and embrace Lead Generation (CPL) within the brand's online customer acquisition efforts, as well as pureplay Cost per Acquisition (CPA).

This is clearly well underway amongst leading brands. According to a report from the Internet Advertising Bureau (iab), 125 million consumers made a purchase via an affiliate site last year with a spend over £15 billion in 2014. 

Bear in mind also that £1.1 billion of sales was generated from 30 million contact form submissions. That averages a whopping return of £36 per form submission: an extremely positive lead generation number.

But how do you know, as a brand advertiser or agency, whether to adopt lead generation, or pure affiliate activity? Or is it even plausible to do both? To decide, one must consider the following:

The objective

Think about the customer journey on the site. Is it a case of the user being self sufficient (i.e. having to go to basket- a natural CPA play), or is it fragmented (for example, confirming your registration on email to continue). 

Then set the objective. Of course it is revenue, but is that direct from the customer contact or do you want or build a prospect database that you can nurture, and then offer various products or broadcast to a newsletter, for example? 

Clarity is key for your acquisition campaign to be a success and achieve sustainable partnerships with your media suppliers and affiliates.


This is quite possibly the most critical metric. How is your business set up, and how is it fixed to respond and attend to the enquiries or orders? 

If you are a small e-commerce shop for example, a sole trader with a small site - you really have no choice but to work on CPA in terms of ease of management and execution. This enables you to monetise and only pay out on the completion of an action (transaction). 

However, if you have resources such as CRM or marketing automation technology, or a call centre to follow up on lead capture, then lead generation is the perfect start to the conversion journey. 

Effective lead generation is all about timely and relevant follow up to ensure your brand touchpoints are high quality. The call to action must be sure to reflect the follow up e.g. 'Sign-up to offers' or 'Call me back', therefore the prospective buyer is well aware of what is to follow.

Rethink the commercials

​Pricing it right with your media partners and affiliates is crucial for campaign quality, longevity and success. Offer enough of a payout to be enticing but be wary of both margin and customer lifetime value.

With CPA, you must offer a fixed price payout e.g. £30 CPA on conversions (ideal for standard products of similar/identical value e.g. event ticket) or a percentage (e.g. 6% of basket value) - ideal for multiple items in a basket- fashion for example.​

CPL payouts should take into account the loose equation of CPA / Number of leads required to convert. For example if the cost of sale is £200 and there is knowledge that one in 10 convert, the £20 CPL mark is a good starting point. Bear in mind, however, that various factors are at play e.g. channel used, detail of lead form. Again, price it right to entice the right traffic.

Build web properties with goal in mind

Ensure your 'Contact Us' forms and pages are designed to capture data. Even if CPA is the goal, abandoned baskets and bouncing visitors are commonplace, and if you want returning and engaged visitors, capture that email address and start thinking about how to get them back to ultimately convert them to that all-important sale!

There are many more details and nuances to consider within each metric- but they are literally a story for another time. In short, consider your business, what you can and cannot do, set the goals and that should help decide on the most appropriate performance marketing metric.

Simon Akers

Simon Akers

Simon is the founder of Performatas- a performance marketing agency connecting brands to their target customer via online lead generation and data-driven marketing. Simon has been working with leading brands for over 11 years and helping to advise on implemention of scalable CPA and CPL solutions along the way.

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