Evaluating the return on investment (ROI) is an ongoing issue with influencer marketing. Counting the likes and shares is not an accurate method to determine whether the investment made by the brands is worth it. The likes and shares are only vanity metrics. This is the reason why brands are turning to a cost per action (CPA) revenue model for influencer partnerships.
Cost per action or cost per acquisition is an advertising pricing model that is generally used in affiliate marketing. Using this model, the brand pays a certain amount to the content creator, based on the number of actions he/she delivers. The brand has authority over a CPA revenue model. Typically, the brand pays the Instagrammer, blogger or agency only when users perform an action; in the absence of which the brand pays nothing. Thus, this pricing tactic ensures that the brand gets something in return for the money is spent. Also, the influencer is encouraged to create more compelling content as he/she can earn more with each new action resulting from the content.
Reasons for Brands turning to CPA Model for Influencer Marketing
The cost per action model fits every brand, regardless of size. It is a scalable and customizable method for use by the brands. This model includes three entities: the influencer who promotes the product/service, the brand which wants to augment sales by generating leads, and the platform that links the brand and the influencer together.
Brands need to take a customized approach based on their budget and campaign objective so that they can witness the extensive reach of influencer marketing.