Cost per action is a digital advertising payment model that allows to charge an advertiser only for a specified action taken by a prospective customer. All actions covered by the model are directly related to some type of conversion, ranging from a newsletter sign up to a link click or sale, and determined by the advertiser. 

Cost Per Action(CPA) vs. Cost Per Click (CPC)

Cost per click (CPC) measures the cost or cost-equivalent for each click on your ads, while cost per action (CPA) allows you to determine the action (views, leads or sales) you want to measure. CPC is designed to drive traffic to a website whereas CPA includes various conversion related actions

Cost Per Action (CPA) vs. Cost Per Lead (CPL)

Cost per lead (often called “online lead generation”) is an online advertising metric used to measure the cost of generating qualified sales leads. CPL helps to identify prospective customers who have shown intent to buy and are close to the end of the buyer journey, whereas cost per action is designed to measure all types of conversion related actions across the entire customer journey.

Why is Cost Per Action Important?

 Cost per action allows advertisers to control advertising costs for specific marketing objectives, as it is designed to only charge for the ad when a chosen action is completed. With the payment for the ads being based on completed actions, it also gives the advertiser better control of tracking and maximizing the return on investment across different marketing channels. Tracking CPA ensures that you’re investing in the most cost-effective channels as well as helping to gauge the success of various marketing efforts.