What is CPA, CPC, CPM, and RevShare? Understanding Payment Models
If you’ve ever looked into digital marketing, affiliate marketing, or online advertising, you may have come across terms like CPA, CPC, CPM, and RevShare. But what do they actually mean? Don’t worry—we’re breaking it all down so you can understand these payment models like a pro!
1. CPA (Cost Per Action)
CPA stands for Cost Per Action (sometimes called Cost Per Acquisition). This means that an advertiser only pays when a specific action is completed, such as a sale, a form submission, or a sign-up. Think of it as a “pay-for-results” model.
Example: If you run an affiliate website and promote a company’s product, you only get paid when someone makes a purchase through your referral link.
Why is CPA important?
Advertisers love it because they only pay for actual conversions.
It’s great for affiliates who can drive high-quality traffic.
It reduces wasted ad spend on uninterested users.
2. CPC (Cost Per Click)
CPC stands for Cost Per Click—meaning an advertiser pays every time someone clicks on their ad, regardless of whether they make a purchase.
Example: When you see ads on Google or Facebook and click on them, the advertiser gets charged a fee for that click.
Why is CPC important?
It’s commonly used in search engine and social media ads.
It helps advertisers attract potential customers quickly.
It allows for budget control since advertisers can set max CPC bids.
3. CPM (Cost Per Mille – Per 1,000 Impressions)
CPM stands for Cost Per Mille, where “Mille” means 1,000 impressions. Advertisers pay for every 1,000 times their ad is displayed, even if no one clicks on it.
Example: If an ad has a CPM rate of $5, the advertiser pays $5 every time their ad is shown 1,000 times.
Why is CPM important?
It’s great for increasing brand awareness.
It works well for display ads and video ads.
It’s ideal for businesses that want visibility rather than immediate conversions.
4. RevShare (Revenue Sharing)
RevShare, or Revenue Sharing, means the affiliate or partner earns a percentage of the revenue generated from a sale or subscription.
Example: A streaming service may offer affiliates 30% of the subscription fee for every customer they refer who signs up.
Why is RevShare important?
Affiliates can earn ongoing commissions (especially for subscription-based products).
Advertisers only pay when they generate revenue.
It fosters long-term partnerships between brands and affiliates.
Which Model is Best?
Each model has its strengths:
CPA is great for performance-based campaigns.
CPC works well for driving traffic to a website.
CPM is ideal for brand awareness.
RevShare is perfect for long-term earnings.
Understanding these models helps businesses and affiliates choose the right strategy for their marketing goals. Now that you know the basics, which payment model do you think suits your needs best?