CPS – Cost Per Sale or also known as PPS – Pay Per Sale, is an online advertising model based on each time a sale is made. For example, if a customer follows an affiliate link to the
advertisers site and makes a purchase in accordance with the affiliate agreement, the publisher will get paid.
By earning a percentage of the sale, for example, the affiliate would simply have to implement the campaign, and in most instances, it is not a difficult or costly thing to do. The company, on the other hand, reaps the benefits of widespread exposure especially in affiliate networks that have many members, yet they only incur the cost when a sale is transacted.
The benefits of cost-per-sale (CPS) affiliate campaigns are numerous. For one, they minimize the marketing and advertising costs for independent software vendors.
When running a CPS campaign, you pay only after a sale (involving an actual credit card transaction) has been completed. This is in contrast to the potentially risky structure of other marketing and advertising options where costs must be compensated upfront, and despite the success or failure of the campaign.
For another, cost-per-sale affiliate marketing reduces your vulnerability to frauds. You can incorporate robust fraud protection by banning IP addresses that have been involved in fraudulent behavior in the past or banning the use of prepaid credit cards for point-of-sale transactions.
You can also monitor malicious form stuffing and take action against those IP addresses. However, cost-efficiency and fraud-protection are not the only reasons why CPS campaigns make great marketing strategies.
Five reasons online software companies should consider CPS Affiliate Marketing:
1 Publisher-centric
Cost-per-sale campaigns are more publisher-focused than cost-per-click and other campaigns, which allow little control to publishers. It’s a fairy low-risk strategy to attract new customers to your software and services. It allows the publisher to track their spending because with the CPS model, you only pay commission if a lead resulted in a completed purchase/sale.
2 Wider reach
One of the factors that works in favor of CPS campaigns is the affiliate network associated with it. You can easily reach hundreds of thousands of virtual customers across the globe, who are regular audiences of your affiliates.
3 Longer exposure
In addition, you can have your banner displayed on an affiliate’s network for an unlimited period of time. With CPC and other campaigns you do not have the same advantage.
4 More control
In general, the CPS model has a stronger correlation between the campaign and banner quality and the eventual number of sales. Thus, by controlling the quality of the former, you can influence sales and revenue. In addition, CPS campaigns allow you to control such things as IP addresses and clicks generated by bots.
5 Easy optimization
Cost-per-sales marketing strategies allow for active, accurate real-time reporting, which you can use to optimize campaigns later. Analytics with advanced capabilities such as frequency-cap implementation and monitoring of effective cost-per-acquisition rate, provide you with a more accurate set of acquisition cost metrics.
In addition, you can track the source of purchase for up to a month after they visit your website, and leverage the information to fine tune targeting and placement.
So to sum it up, not only does CPS affiliate marketing offer greater reach, visibility, control and analytics, but it can also pays for itself (because you only pay after a sale). If that’s not an effective marketing tool, what is?
Avangate specializes in providing customer-centric, digital commerce solutions for ESD and SaaS based companies. We help our users by providing all the tools and expertise you need to accept payments online, optimize the sales process and increase your visibility, locally and globall