CPA advertising, or cost per action, is not to be mistaken for PPC, or pay per click advertising, because they are totally different in their format and operate in entirely different ways. CPA ads are managed by companies, known as CPA networks that are experts in placing these types of ads. A CPA network is actually the online equivalent of a media broker, who brings the advert to the advertising space.

Advertisers will contact a CPA network to market their service or product and their desired outcome is to either create sales from the promotion itself, or to generate a list of targeted, qualified leads. For the short term, the first course of action would be the best. However, a list of responsive, qualified prospects will produce revenue for many years to come, as long as a good rapport is maintained. For this reason companies are prepared to pay out significant commissions to publishers who prove they can generate good leads.

There are basically two main actions that businesses pay a commission for, when they have been carried out. The first is for a product order and the second is for generating leads. A CPA campaign will continue for either a set number of actions, basically until a thousand prospects have been recruited or one hundred sales have been made, or it will continue until a specified expiry date has been reached. Generally, the commission is a fixed amount in each case, with percentage based payouts being quite rare. CPA is considered as the best way to generate mailing lists of targeted, qualified prospects.

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