Cost per performance advertising applies to any media purchased on the basis of a defined action, including engagement (cost per visitor), click (cost per click), registration (cost per lead) and purchase (cost per sale). Cost per performance advertising shares the investment risk between advertiser, agency and media owner – payment is only made once the user completes a specific action. While affiliate marketing and Google AdWords are the most recognized cost per performance programs, there are a multitude of programs and publishers that offer payment on performance.

In this post I reveal the nine most significant factors to consider when launching or evaluating an existing cost per performance program that contributes incremental revenue and return on investment.

1. Remove conversion duplication.
Conversion duplication occurs when users are being reached by the same advertiser across multiple sites and tracked across different reporting systems. An Atlas Institute study entitled The Hidden Costs of Pay per Performance Media estimates the rate of duplication to be between 20% to 25%. The issues of conversion duplication is further magnified given publishers typically sell their remnant inventory to multiple ad networks and by ad-networks buying, selling and trading ads from each other to maximize reach and reduce frequency. If you are working with multiple ad-networks such as Advertising.com, Blue Lithium or DrivePM your conversion duplication increases significantly. Conversion duplication not only has a significant financial impact as advertisers over-pay for conversions but it skews media inventory optimization and investment allocation decisions.

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