CPS
CPS (Cost-Per-Sale) is an interaction model in which the advertiser pays the owner (the site, for example, the site owner or partners) for users who go to his site to place an order or purchase.
CPS is also often referred to as the CPP indicator - Cost-Per-Pay - payment for the sale. This is one of the most expensive types of advertising.
To calculate CPS, you need to make a calculation using the formula:
It is similar to CPA, but unlike price per sale, cost per action provides for another broader activity, although it is calculated using the same formula. According to the CPA algorithm, an action can be, for example, viewing a product, and not necessarily placing an order (target, conversion action).
How the CPS model works:
- the banner is placed on the site of the advertising platform;
- the advertiser puts a code on their site that tracks user actions;
- The advertising platform receives payments for each purchase of goods in the advertiser's store.
Previously, the CPS metric worked like an affiliate showcase. The owners of high-traffic sites hosted a range of store products, potential customers clicked on them, placed an order, and the site owner received a percentage of the sale.
Later, this model was adopted by large banner networks. Successful use ensured the rapid growth of the market. Plus, the constant expansion of goods on the Internet, electronic settlements, and the service sector have led to the development and successful application of the model.
To work according to this scheme, advertisers need to:
- have a website that sells products from the banner;
- products must be in demand among a wide range of customers;
- products should only be sold online, because this approach allows you to track the exact number of purchases from an advertising banner.
The CPI metric is not affected by how attractive the banner is, what payment options are available, how convenient and quick it is to checkout, as well as the interface and design of the site.
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