Virtual Electronics implemented a Cost Per Action (CPA) model for a corporate software
supplier with its headquarters in London and Singapore.
The Chief Marketing Officer of the company revealed that they were facing numerous challenges around the collaboration between the advertiser and the lead resources. We decided to develop a platform that would allow the client to overcome the difficulties in process automation of joint work between the advertiser and the lead resources, including supervision over compliance with agreements between participants.
To fulfill the tasks set by our client, Virtual Electronics implemented a Cost Per Action model, which includes architecture description, business and functional requirements, and domain model.
The solution implemented by Virtual Electronics led to the 50% conversion rate increase with a half decrease in the client’s spending.
Facing many challenges, such as difficulties in process automation of collaboration between the advertiser and the lead resources, as well as monitoring compliance with agreements between participants and automating business processes, the client was referred to Virtual Electronics.
As part of the project, it is necessary to develop a platform based on the CPA model where the entire process of collaboration between the advertiser and the lead resources is implemented. The main goal is to automate the process of searching participants and monitoring compliance with agreements between them.
For automating business processes, the following requirements should be implemented:
• The offer and legally significant documents to sign between the Advertiser – the CPA aggregator – the Lead resource for connecting all participants to the platform;
• Accounts registration with business roles distribution;
• Maintenance of the platform by administrative staff (PAS);
• Setting up the platform for the Advertiser by uploading a database of available leads to CRM Platforms and portrait formation of a potential lead;
• Setting up the platform by Lead resource;
• Signing legal documents upon the completion of work, and loading them for storage to the platform’s server;
• Payment for services through the integrated payment system
For proper functioning of the developing system, the following services should be introduced:
• Lead Counter. When the web-master sends the information about an attracted lead and the Advertiser approves it, the service sends a request to record this lead into the internal CRM.
• Expenses Spent. The advertiser pays the Lead-resource for the lead, and the service sends the request automatically to add a record into the CRM DB.
• Offer Search. The service sends a request to search for an offer that matches Lead-resource parameters.
• Contract. When the AC is completed, the request for creating a document based on a template using AC results is sent.
• Contract Storage. Once the created document is approved, a contract is passed to the Documents DB.
• Collecting Analytics. When the Advertiser requests the AC analytics available in their PA, the service sends a request for data collection (for a selected period and lead-resources) to the CRM DB.
To ensure reliability, the system architecture must be able to maintain its operation in the event of failure of a component of the technical equipment or part of the telecommunications system. In this case, it is important to save all the information accumulated at the time of failure or data loss, even in case of failure of two or more identical components of the technical equipment, regardless of their purpose, with the subsequent restoration of the system upon reparation and restoration of work. To ensure the reliability of the system, it is advisable to back up system data.
The system interface should have convenient, intuitive navigation, displaying on the screen only functions necessary for a particular user. The system should help the advertiser establish relationships with lead resources (in terms of mutual transactions) in order to organize an effective, managed, stable, and automated process for attracting lead traffic. The main mutual operations should include:
• Lead Traffic Capture – potential leads are transferred from the lead resources to the website or other Advertiser’s communication channel. The system fixes the link lead time and the followers’ amount, starting from the agreement subscription between the lead-resources and the advertiser.
• Attracted Traffic Fee Calculation – a fee is a sum of leads (traffic) attracted during the reporting period. The unit of calculation is one (1) lead.
• Offer Acceptance – the conclusion of an agreement between the platform and the advertiser/lead resource in accordance with the established conditions. Successful completion of registration on the platform is impossible without accepting the offer.
• Analytics – set of mechanisms allowing for forming the data arrays necessary or convenient for the formation of data arrays for decision-making and/or the formation of legally significant actions and settlements between the subjects of the system from the primary data of the system control functions.
• Integration – establishing links between different platforms. Potential leads are transferred to the advertiser's website or other communication channels through the Lead Resources channel. Conversion data is transferred to analytical services, such as Google Analytics. The integration of the platform with the service is necessary for the proper lead count. Also, integration with payment systems is required for the successful operation of the platform.
The description of the target process should look like this:
• After registering and accepting the offer, the advertiser gains access to the personal account (PA) where they can set the parameters of the advertising campaign (AC) and their desired budget. The ability to download and analyze the CRM client base for selecting the look-alike target audience should be available in their PA.
• The lead resource searches for placed offers, filtering those offers that do not fit the specified working conditions. The lead resource selects an offer to attract traffic based on search results.
• The whole workflow is carried out on the platform. All documents are stored in the database with an option to view the agreement for both sides.
• The lead resource attracts traffic for the advertiser through its channels. When information about the attracted lead arrives on the platform, the advertiser checks its compliance with the offer and the target action. The decision on confirmation or rejection of the lead for its further accounting and payment can be made following the results of the analysis.
The ability to obtain information on ongoing projects, analytical data and expenditure/income AC statistics should be available in the personal accounts of process participants.
To overcome all the business challenges faced by the client, Virtual Electronics implemented the CPA model.
First, the advertiser determines the need to attract traffic to increase sales. By selecting the CPAA (CPA Aggregator) platform, the advertiser registers and activates the account, gaining access to their Personal Account (PA). The leading resource reveals the need to increase revenue. If the CPAA platform is selected, the host resource activates an account gaining access to your PA. After entering the user's PA in the system, the advertiser creates a commercial offer further attracting, receiving, and analyzing traffic. The offer is closed upon the completion of the advertising campaign
The database (DB) is updated automatically when the lead-resource is registered successfully. The information is visible to Advertisers as the Lead-resource cooperates with their offers.
The DB is filled in automatically when the Advertiser is registered successfully. The information is visible to lead-resources when choosing an offer.
Approved by the Advertiser, the leads are automatically added to the DB. Also, there is a possibility to upload an existing Advertiser database.
The DB is updated automatically whenever a created document is approved. Visibility is set up only for the Advertiser and Lead-resource specified in the contract.
In the case of our client, the CPA model was the correct strategy to use. With the 50% conversion rate increase, we have managed to cut the costs by 50%. Prior to implementing the CPA pricing model for the client, they used to spend about $300 per day with a 5% conversion rate. After transitioning to the CPA pricing model implemented by Virtual Electronics, the client was spending $150 per day with a 10% conversion rate.
As we enabled the client to collect a double volume of conversions at half the spend, the idea of implementing the CPA pricing model turned effective at helping improve profitability which was our client’s primary goal.