Value Per Action
Encyclopedia
Value Per Action refers to an online marketing business model similar to the Cost Per Action
(CPA) model. While Cost Per Action provides a low risk arrangement in which the seller only pays an advertising fee when a consumer takes action (such as purchasing their product) Value Per Action extends that model to add revenue sharing with the consumer.
Using the VPA model, sellers don't incur advertising/marketing costs until a sale takes place, and can increase the likelihood of a sale by increasing the advertising dollars. Because advertising dollars are shared between the marketer and the consumer, the amount of advertising dollars becomes a direct incentive to the consumer. Two sellers may offer the same product at the same price, but provide differing incentives to consumers through advertising dollars.
With the addition of transparent revenue sharing to the CPA model, VPA becomes a consumer-friendly approach in which the seller's advertising dollars provide a direct benefit to the consumer--effectively driving down the net price. Placed in a comparison shopping marketplace, the competition between sellers to provide better revenue provides additional downward pressure to the net price paid by consumers.
One example of VPA is Jellyfish.com
.
Cost Per Action
Cost Per Action or CPA is an online advertising pricing model, where the advertiser pays for each specified action linked to the advertisement....
(CPA) model. While Cost Per Action provides a low risk arrangement in which the seller only pays an advertising fee when a consumer takes action (such as purchasing their product) Value Per Action extends that model to add revenue sharing with the consumer.
Using the VPA model, sellers don't incur advertising/marketing costs until a sale takes place, and can increase the likelihood of a sale by increasing the advertising dollars. Because advertising dollars are shared between the marketer and the consumer, the amount of advertising dollars becomes a direct incentive to the consumer. Two sellers may offer the same product at the same price, but provide differing incentives to consumers through advertising dollars.
With the addition of transparent revenue sharing to the CPA model, VPA becomes a consumer-friendly approach in which the seller's advertising dollars provide a direct benefit to the consumer--effectively driving down the net price. Placed in a comparison shopping marketplace, the competition between sellers to provide better revenue provides additional downward pressure to the net price paid by consumers.
One example of VPA is Jellyfish.com
Jellyfish.com
Jellyfish.com was a reverse auction online shopping site website. The Middleton, Wisconsin-based company was acquired by Microsoft in 2007. On May 22, 2008, Microsoft officially announced the cash back service as part of their Live Search group of tools...
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See also
- Internet marketingInternet marketingInternet marketing, also known as digital marketing, web marketing, online marketing, search marketing or e-marketing, is referred to as the marketing of products or services over the Internet...
- CTRClick-through rateClickthrough rate is a way of measuring the success of an online advertising campaign. The clickthrough rate of an advertisement is defined as the number of clicks on an ad divided by the number of times the ad is shown , expressed as a percentage. For example, if a banner ad is delivered 100...
- Click-through rate - CPMCost Per MilleCost per mille , also called cost ‰ and cost per thousand , is a commonly used measurement in advertising. Radio, television, newspaper, magazine, out-of-home advertising, and online advertising can be purchased on the basis of what it costs to show the ad to one thousand viewers...
- Cost Per Mille - eCPM - Effective Cost Per Mille
- CPT - Cost per thousand
- CPICost Per ImpressionCost per impression, often abbreviated to CPI or CPM for Cost per thousand impressions, is a phrase often used in online advertising and marketing related to web traffic. It is used for measuring the worth and cost of a specific e-marketing campaign. This technique is applied with web banners,...
- Cost Per Impression - PPCPay per clickPay per click is an Internet advertising model used to direct traffic to websites, where advertisers pay the publisher when the ad is clicked. With search engines, advertisers typically bid on keyword phrases relevant to their target market...
- Pay per click - CPACost Per ActionCost Per Action or CPA is an online advertising pricing model, where the advertiser pays for each specified action linked to the advertisement....
- Cost Per Action - CPC - Cost Per Click
- eCPA - effective Cost Per Action
- CPT
- Cost per conversionCost per conversionCost per conversion is an advertising and marketing term, describing the cost of acquiring a customer, typically calculated by dividing the total cost of an advertising campaign by the number of conversions...