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CPA/CPC – How do marketing models hold up during the COVID-19 outbreak

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The coronavirus outbreak has impacted all markets and niches worldwide, though to different extents. Some sectors have experienced an uptick (for example, gaming and online education), but most have experienced a considerable decline.

The pandemic has resulted in a dramatic change in buying trends and consumer behavior, which has caused businesses to reduce their advertising budgets. Inevitably, this affects the revenue of webmasters across all niches. 

In this post, we’ll tell you how and why webmasters suffer from COVID-19. In addition, we’ll explain the current state of CPA (cost per action) and CPC (cost per click) marketing. 

How does the coronavirus affect webmasters?

Webmasters have to cope with two main problems caused by the pandemic: decrease in traffic and decrease in revenue (for both CPA and CPC marketing models).

  1. The decrease in traffic is a daunting problem for webmasters. With so much up in the air, the thoughts of many people seem dominated by the pandemic. Therefore, search trends worldwide have undergone profound changes. The search volume for keywords such as coronavirus, coronavirus cure, and other similar terms are soaring. In fact, Ubersuggest reported that the word “coronavirus” has had 3,350,000 searches/month in the US alone.
The decrease in traffic

People are obviously getting increasingly unsettled about the implications of the situation. Thus, they browse the web, trying to find answers to their pandemic-related questions.

How Does the Coronavirus Affect Webmasters?
How Does the Coronavirus Affect Webmasters?

Coronavirus-related search trends are so overwhelming that Google has even released a Google Trend Coronavirus Hub, while Similarweb launched its Data & Insights Hub.

  1. The decrease in revenue for both CPC and CPA marketing models. The decline in traffic inevitably results in a revenue decline for both CPC and CPA models. Though COVID-19 has negatively influenced both CPA and CPC marketing, the problems marketers have to wrestle with are different.

The CPC marketing model

In the face of recession, many people are reducing their spending and focusing on essentials. Many marketers have responded to the situation by cutting marketing spending. For example, Amazon has reduced its Google Ads spending to nearly nothing

In the world of CPC marketing, the price of a click is determined by a bidding system. In a nutshell, the more advertisers are bidding, the higher the cost per click (and vice versa). Understandably, click costs have dropped and the average revenue of the CPC model has gone into a nosedive.

Furthermore, Reddit users have reported that many advertisers, especially in the niches of eCommerce, entertainment, hospitality, and travel, have paused their CPC campaigns altogether.

However, other users claim that some niches, including health, remote education, and grocery deliveries have seen an upturn.

The CPA marketing model

As for the CPA marketing model, the situation is different. In the world of CPA marketing, advertisers pay only if a conversion takes place. Thus, they don’t have to cut back on advertising costs.

As a result, CPA commissions haven’t dropped and publishers can still drive traffic to a merchant’s website in order to generate revenue. However, due to the decline in consumer spending, the conversion rates in CPA marketing have fallen as well.

Actions

Though the changes in CPA marketing are less sweeping, there have been some. Here are some challenges that CPA marketers currently face:

  1. There is a significant decline in conversion rates even when the amount of traffic remains at the same level.
  2. Due to the travel restrictions, the number of returns and cancellations is growing.
  3. The hold-time period has increased, as it takes more time to commission a customer’s payment.
  4. Some advertisers have put their CPA marketing programs on hold.

The difference between CPC and CPA marketing for advertisers

In the CPC model, an advertiser pays some amount of money to a publisher whenever a visitor is referred to a merchant’s site. So, you should tweak your advertising campaign in such a way that the profit exceeds the amount spent. However, this is not always possible. For example, advertisers can pay over $10,000 and get back only about $7,000 in revenue.

CPA marketing is a performance-based model in which publishers only get paid when a visitor performs a specific action, such as the purchase of a product. CPA marketing is a win-win solution for both advertisers and publishers, as the former doesn’t pay anything unless a purchase takes place. That’s why CPA marketers don’t have to cut off advertising budgets and commissions remain the same.

There is practically no risk to the advertiser in the CPA marketing model. As for publishers, CPA marketing is also more beneficial than the CPC model. 

In the CPA model, the advertiser can offer a large percentage, as there is less risk. If you have high-quality traffic, you will get more out of CPA marketing than from the CPC model, in which rates are set as low as possible, due to the risks of draining the budget.

In CPC marketing, despite all their effort invested, webmasters see a decline in revenue when cost per click rates drop. When earning money with CPA marketing, publishers can plan their campaigns more thoroughly and estimate the proportions of both costs and profits, which is why the average revenue is higher.

How does Travelpayouts measure up as a CPA network? 

Travelpayouts is the biggest CPA travel affiliate network, which includes over 30+ affiliate programs and has over 240,000 registered affiliates. In addition to a wide collection of trustworthy offers, the Travelpayouts affiliate network provides dedicated, professional customer support and competitive commissions. In addition, the network offers affiliates a wide range of easy-to-use promotional tools, including an API, White Label solutions, a mobile SDK, and more.

Travelpayouts primarily operates as a CPA marketing network, though affiliates can also generate revenue using the CPC model with our help. We prioritize the CPA model, as it’s an easy-to-understand and lucrative marketing solution for both webmasters and advertisers. Due to this, very few of our programs are currently on hold. You can find the most up-to-date information about them in this post.

Unfortunately, almost all markets seem to be in a downturn now and conversion rates have dropped. Your income might have plunged as well.

We feel for you and want you to know that you’re not alone.

The Travelpayouts team works hard no matter what and we are always here to support you. We are ready to respond quickly and effectively to all these changes. Also, we are doing our best to collect and share analytics data about the COVID-19 situation, which may be helpful for webmasters. You can find the data and some actionable tips on how to cope with the situation in our COVID-19 Survival Kit.

As always, our support team is ready to provide answers to any questions you have. As is every member of our team whose help and advice you may need, from our SMM manager to our SEO specialist to our marketing manager and more. Please feel free to send an email to [email protected] if you have any questions or concerns during this trying period.

The future of CPC and CPA

It’s hardly possible to make any forecasts in an ever-changing situation like this. But we’re convinced that both CPC and CPA marketing models will survive despite the downturn. We also believe that now is the time to get ready for the deferred demand in the near future, both from advertisers and audiences. 

Admittedly though, the worldwide economic situation is unstable and it’s possible that some advertisers will fail to scrape through this turbulent period. Please bear this in mind when choosing a niche and developing your marketing strategy. 

It’s also likely that when the COVID-19 pandemic is over, advertisers will become more averse to risking their marketing budgets. Thus, more and more companies may switch to the CPA marketing model, as it’s absolutely transparent and risk-free.

Nowadays, the whole world seems to be struggling with drastic changes that COVID-19 has imposed upon us. However, we’re sure that this challenging period will be over soon and we’ll witness rebounding economies worldwide. 

Don’t get discouraged even if your traffic influx, conversions, and revenue currently leave much to be desired. This is temporary. Make the most of this time to boost your skills and knowledge, dive deep into digital marketing, and map out your future marketing strategies.