• by Amy Corr , Staff Writer, May 29, 2002

There are three letters that send many people in this industry into a tizzy: C-P-A. CPA stands for cost-per-action and is just another way to define affiliate marketing. CPA is not the most loved and admired pricing form for publishers, since it places more responsibility, and more importantly, greater risk on the publishers (they don’t get paid unless the advertiser gets a lead). Commission Junction (www.cj.com), a network founded in 1998 by Lex Sisney and Per Pettersen, focuses entirely on this pricing structure.

Advertisers contact CJ, with hopes of driving traffic to their website. They place their creative in CJ’s system, give an offer to publishers, then wait to see what happens. Publishers then go into CJ’s database and choose which ads will run on their website. Publishers are paid only when a lead is driven to an advertiser. Payments to publishers differ depending on the particular advertiser. The obvious advantages to each side is that publishers get paid and advertisers build brand and increased website traffic.

Commission Junction currently has 5,500 publishers in its network and is serving 5 billion impressions monthly. The network used to offer a CPC pricing model, but overall results showed that this was merely driving traffic and not consumers, so CPC was dropped.

According to CJ CEO Lex Sisney, CJ’s click-through rates are 7-8 times better than traditional CPM deals. As a self-described ad network, Commission Junction faces competition from both online ad networks and affiliate programs. CJ serves and track all the ads with their proprietary technology, CJ 6.0, which gives reports in real-time and both publishers and advertisers receive copies.

In July 2001, CJ launched an open marketplace that publishes payment and conversion statistics on publishers, advertisers, and all ads running throughout the CJ network. This way, publishers and advertisers can see which ads do the best and the poorest throughout the network. The metric used in the open marketplace is EPC, or earnings-per-hundred-clicks. EPC shows the advertiser’s efficiency in turning visitors into profit, and it shows the publisher’s conceivable success in generating commissions. EPCs can be as low as $1 and as high as $50. CJ’s Sisney states that these metrics will greater assist those using the CPA model. “We have put significant effort into pioneering the mechanism for providing measurable results to advertisers and publishers using the pay-for-performance model. These simple, straightforward metrics will have an immediate impact on our clients’ ability to advertise smarter and acquire more customers. The CPM advertising model just cannot provide this type of accountability.”