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CPA or Cost Per Acquisition

This method of online advertising is good if you can convert the leads you get to buyers. The nice thing about this is you are only paying for the lead. Once you get the lead you can sell that lead anything you want. The method of getting the lead will cost you between $1 and $50, but if you make good money on each sale this is not much. Plus you have more websites moving to this form of marketing. As I said before you need to test before setting up a large campaign.

PPC or Pay Per Click

PPC advertising rates vary depending on how competitive the term is you are trying to compete for. Many will cost you 5-50 cents per click, but if you are in a highly competitive market paying $20 or more for each click is something you can expect. The downside to PPC is if you write a great ad that gets lots of clicks might mean you are paying for a lot of visitors that take no action. When writing ads for pay per click you want to only get highly targeted traffic. With Banner ads the more traffic you get the better. So you can see that with these two methods of advertising you can get a completely different conversion rate. Since you might get 1000's from banner ads that only convert to buyers at a rate of half a percent, where as a finely tuned ppc campaign could have a conversion rate of 25% or higher, since you weeded out the tire kickers before getting to your site.

I use PPC when I am trying to sell something, and I use banner ads when I am trying to get people to join my newsletter. I still test to see which makes the most sense.