What is CPS Advertising and How to Use it?

When running any campaign within your business, you should monitor and evaluate its effectiveness. The goal of the campaigns is to attract more customers and boost sales. The big question and the area of interest is to evaluate if the campaigns are effective or not. You may end up realizing that you are spending a lot of money on campaigns that are generating nothing.

Besides, you need to evaluate the amount of money you spend to generate a single sale. You can only figure out all these aspects when using the CPS advertising approach, also known as cost per sale. This is a strategy that gives you the power to generate more revenue from sales without spending a lot of money.

However, there is a lot of information and insights behind CPS advertising that you need to know. Peruse this article for more actionable insights!

What is CPS Advertising?

Cost-per-sale advertising is a unique strategy whereby an advertiser is required to pay the agreed commission to the publisher depending on the number of sales closed on the ads. This strategy is also referred to as pay per sale, PPS, or cost per sale acquisition, CPA. Note that this model is mostly applied in affiliate marketing.

However, you can also modify and apply it to other online marketing, such as email marketing. In the field of affiliate marketing, COS advertisers are required to pay a higher amount of commission compared to other forms of online advertising, such as Pay-per-click (PPC).

This is triggered by the fact that VPS advertising mainly depends on the interests of the publisher and the advertiser. The two parties usually aim to generate sales and boost business growth. In order to elevate profit and productivity, advertisers need to have a good understanding of CPS and how to track its performance.

To calculate the CPS, you need to divide the total amount of money the business spends on the campaigns by the number of sales generated. Note that you can use this strategy to calculate the effectiveness of different types of advertising campaigns. Digital marketing is the most convenient option since it incorporates accurate details that can be measured.

With CPS advertising, advertisers can track the return on investment and evaluate the general growth of their businesses. To enhance the effectiveness of your online advertising, you need to incorporate this strategy into your daily operations.

How to Calculate the Cost Per Sale?

Before calculating the cost per sale, you need to figure out the budget and the campaign data range. Every dale recorded is tracked once the ad gets active. The cost per sale is mainly calculated by dividing the general campaign cost by the total sales you have recorded. When calculating the CPS, you need to factor in the entire cost of the campaign.

Another critical aspect you need to keep in mind is the performance of the ads. Also, consider the aspects outlined below.

Prospect-to-Customer Conversion

You need to figure out the amount of time it takes to convert a potential buyer into a paying customer. Keep into consideration the stages they need to undertake before they turn out to be customers. Some of these stages include

  • Proposals
  • Phone calls
  • Video conferencing

You should factor in the cost of conducting all these activities to come up with a reliable figure.

Customer Service

The cost of customer service training and the support team is also critical when calculating the CPS. Note that this factor is critical since the quality of the customer service is likely to impact the number of sales deals you close. Ensure that you have a superior support panel system that enhances customer satisfaction and the general growth of the business.

Lead-to-Prospect Conversion

Before you locate potential prospects, you need to undergo a detailed process to get things running. Marketers struggle a lot to convert a stranger into a prospect that is likely to convert someday. This means that you need to pay keen attention to your marketing team’s efforts to convert leads into prospects.

To enhance accuracy in your operations, you need to evaluate the costs of benefits, payroll taxes and direct salaries.

Commission

Typically, sales representatives are paid commission based on the number of leads they generate and sales recorded. As the number of sales increases within your business, the amount of commission to be paid also increases. When doing your cost-per-sale calculation, you also need to factor in this aspect.

Web-Based Marketing

Maintaining a business website can be demanding. You need to pay recurring costs such as web hosting a d maintenance to ensure everything is running smoothly. The amount of money you invest in maintaining a website and the initial creation cost should be involved in the calculation. This will help you avoid making losses from the campaigns you are running.

Pros and Cons of COS Advertising

Pros

CPS advertising is a great strategy for both the advertiser and the publisher since it links people with the same interest. Since it links people with similar ideas, it becomes easier for the company to attain its goals in business. The advertiser only makes payment when the ad leads to a sale. This means you only pay for the sakes you make rather than spending money with no definite returns.

In addition, cost-per-sale advertising is a less risky approach since advertisers only pay for what benefits them. You get a better opportunity to monitor how the investment benefits the growth of your business. With this approach, both the publisher and the advertiser work harder to ensure that the strategy works for everybody to benefit.

Cons

Even though CPS advertising is an incredible strategy, it also has its negative side. At some point, this strategy can be relatively expensive compared to other forms of advertising, such as print ads. This is caused by the fact that you pay for the ad and the commission that the salesperson will receive.

In addition, you may not be capable of understanding the number of sales generated by a single ad. Also, you may not understand the return on investment, especially if tracking is not done effectively to monitor the performance of the ads.

Conclusion:

CPS advertising is the best approach to use when you want to reach your consumers directly. The strategy offers an incredible method that marketers can use to diversify their products without spending a lot of money. Advertisers don’t need to spend a lot of money to attain their objectives since CPS offers a better shortcut to get the job done.

Once you understand how CPS advertising operates, it is easier to calculate your efforts’ effectiveness. Keep in mind that getting a better strategy to facilitate your marketing activities guarantees better returns.

What is CPS Advertising and How to Use it?
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