Value Per Action (VPA) refers to an
online marketing
Online advertising, also known as online marketing, Internet advertising, digital advertising or web advertising, is a form of marketing and advertising that uses the Internet to promote products and services to audiences and platform users. ...
business model
A business model describes how a Company, business organization creates, delivers, and captures value creation, value,''Business Model Generation'', Alexander Osterwalder, Yves Pigneur, Alan Smith, and 470 practitioners from 45 countries, self-pub ...
similar to the
Cost Per Action (CPA) model. While Cost Per Action provides a low risk arrangement in which the seller only pays an advertising fee when a consumer takes action (such as purchasing their product) Value Per Action extends that model to add revenue sharing with the consumer.
Using the VPA model, sellers don't incur advertising/marketing costs until a sale takes place, and can increase the likelihood of a sale by increasing the advertising money. Because advertising money are shared between the marketer and the consumer, the amount of advertising money becomes a direct incentive to the consumer. Two sellers may offer the same product at the same price, but provide differing incentives to consumers through advertising money.
With the addition of transparent revenue sharing to the CPA model, VPA becomes a consumer-friendly approach in which the seller's advertising money provide a direct benefit to the consumer--effectively driving down the net price. Placed in a comparison shopping marketplace, the competition between sellers to provide better revenue provides additional downward pressure to the net price paid by consumers.
One example of VPA is
Jellyfish.com.
Reference: Jellyfish Launches Comparative Shopping Website
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See also
* Internet marketing
The Internet (or internet) is the global system of interconnected computer networks that uses the Internet protocol suite (TCP/IP) to communicate between networks and devices. It is a network of networks that consists of private, publ ...
* CTR - Click-through rate
* CPM - Cost Per Mille
* eCPM - Effective Cost Per Mille
* CPT - Cost per thousand
* CPI - Cost Per Impression
* PPC - Pay per click
* CPA - Cost Per Action
* CPC - Cost Per Click
* eCPA
The Electronic Communications Privacy Act of 1986 (ECPA) was enacted by the United States Congress to extend restrictions on government wire taps of telephone calls to include transmissions of electronic data by computer ( ''et seq.''), added ne ...
- effective Cost Per Action
* CPT
* Cost per conversion
References
Online advertising