CPA simply doesn't make sense for all ad campaigns. When Lexus buys ads on a financial news site it's for branding -- they want to get their logo in front of their target demographic. The ads aren't optimized for clicks or leads -- sometimes there isn't even a clear call to action.
Yup, but then why bother with CPM? Just buy display ads for a fixed price in publications they believe their customers might read. Sure, it's not an improvement over what they did in the 50s but they don't have to worry about fraud.
Also with CPA, if I'm a seller, I'm not going to sell to you unless I know your landing page converts. That's asking me to do a lot of due diligence or assume a lot of risk.
There's also the problem of being sure your conversions are attributed to you.
But these aren't that much of a problem in practice, really. See how affiliate marketing works: it's CPA for all intents and purpose masquerading under a different name. The biggest difference might be that the vendor will contact you, rather than make some kind of bid, if he thinks you've the right kind of traffic.
If your audience is interested in a particular product, you quickly discover it through common sense and trial and error, as you can normally see the click-through rates.
Also, a big ticket item with a low conversion rate sometimes earns better than a smaller one with a high conversion rate. As such, maxing out your ROI is really a matter of seeing what contributes to your bottomline.
