Cost Per Sale (CPS)
Cost Per Sale (CPS) is a marketing advertising payment model where the advertiser pays only for an actual completed purchase.
Unlike models that pay for clicks or impressions, costs are incurred only after a product or service is sold.
How the CPS Model Works
The mechanism typically works as follows:
- A user sees an advertisement or an affiliate link.
- They click through to the advertiser’s website.
- They make a purchase.
- The advertising platform or partner receives a commission for the sale.
Thus, payment is made for the final result — a sale.
CPS Formula
The metric can be calculated as follows:
[
CPS = \frac{\text{Advertising spend}}{\text{Number of sales}}
]
Calculation Example
If a company spent €1000 on an advertising campaign and received 50 sales, the metric would be:
[
CPS = \frac{1000}{50} = 20
]
This means the cost per sale was €20.
Where the CPS Model is Used
CPS is most often applied in:
- Affiliate programs (affiliate marketing);
- E-commerce;
- Marketplaces;
- CPA networks.
In such models, partners receive a percentage of the order value or a fixed payout per sale.
Advantages of the CPS Model
For advertisers:
- Payment only for results;
- Low risk of inefficient spending;
- Transparent evaluation of advertising effectiveness.
For partners:
- Opportunity to earn a percentage of sales;
- Scalable income with successful campaigns.
Key Takeaways
Cost Per Sale (CPS) is an advertising payment model where the advertiser pays only for an actual completed purchase.
This approach is widely used in e-commerce and affiliate marketing because it directly links advertising costs to results.
