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Cost per Sale (CPS) Definition
Cost per Sale (CPS) is a performance-based advertising model where payment occurs only when a sale is directly attributed to an ad or marketing activity. It ensures advertisers pay for actual revenue outcomes rather than impressions or clicks.
How Cost per Sale (CPS) Works
- Advertisers run campaigns promoting products or services.
- Sales generated through tracked links or codes are recorded.
- Advertisers pay a pre-agreed fee or percentage per sale.
- Often used in affiliate marketing and e-commerce promotions.
Example of Cost per Sale (CPS)
An online store partners with affiliates who earn commissions only when referred customers complete a purchase.
Why Cost per Sale (CPS) Matters in Advertising
- Reduces risk by tying costs to actual revenue
- Encourages partners to focus on high-intent traffic
- Improves budget efficiency with pay-for-results models
- Common in affiliate programs and e-commerce performance marketing
