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Google AdSense Testing Cost Per Action
alika




msg:1354205
 2:23 pm on Jun 19, 2006 (gmt 0)

Anyone got the invite to test the new Adsense feature - Cost per action ads?

 

Chico_Loco




msg:1354325
 12:14 pm on Jun 26, 2006 (gmt 0)

I wouldn't expect British Airways for example to resort to fraud

Such large companies aren't likely to commit fraud, no, but they aren't likely to move to 100% PPA either because those kinds of companies need to brand themselves reliably, which can be done better with PPC.

europeforvisitors




msg:1354326
 12:27 pm on Jun 26, 2006 (gmt 0)

I do very well with affiliate programs. In fact, I earn considerably more from affiliate programs than from AdSense, and I have an editorial site. What's more, a high percentage of those affiliate sales are from ads, not from integrated links. So, at least in my experience, CPA can be a successful (and easily implemented) form of advertising for both the advertiser and the publisher if the site reaches an audience that's interested in what the advertiser has to sell.

Note the "if." That "if" is why CPA won't replace the current AdSense pricing mechanism, but will merely become an alternative pricing mechanism for publishers and advertisers who find it attractive (assuming that CPA is actually deployed, which is another big "if").

In other words:

If you have a review site about twisty widgets that attracts people who are researching the purchase of twisty widgets, you may be attracted to CPA advertising because it offers greater rewards with little or no additional risk.

If you have a general interest news, entertainment, or portal site whose visitors aren't necessarily looking for ways to buy twisty widgets, you'll probably want to stick with CPC or CPM ads.

If you're an advertiser, you may be attracted to CPA because it means your ads will appear only on sites whose publishers are confident that their clicks (and audiences) will convert.

As a tobacconist might say, "Different smokes for different folks."

hunderdown




msg:1354327
 2:24 pm on Jun 26, 2006 (gmt 0)

all advertisers will jump on ppa ads if offered and leaving ppc ads.

All? Perhaps in some areas. I'd be very surprised to see that happen with many of the advertisers that show up regularly on my site.

But we'll see what happens.

asinah




msg:1354328
 3:07 pm on Jun 26, 2006 (gmt 0)

I am working with several affiliates system but i have been using them for years but I would certainly try Google out as long I have full control of which affiliate are shown own my websites.

jomaxx




msg:1354329
 3:20 pm on Jun 26, 2006 (gmt 0)

there is no way to correctly track sales resulting from your efforts. especially non-internet or different-computer orders and time-displaced purchases cannot be attributed to their origin in large part...

True. Tracking can almost never be done perfectly.

..so you will be cheated

NO. A site owner looks at how a program works and makes a decision to join or not join. That's not being cheated. You get regular reporting of clicks and earnings, and make a decision to stay with the program or drop it. That's not being cheated. As always, it's about the bottom line.

Affiliate marketing is different from simply generating pageviews, and a lot of people here are probably not very far along the learning curve. But it's a valid model that is well-established and can be extremely profitable. Google might end up implementing it badly, or even by forcing publishers into it against their will which would be the nightmare scenario, but the concept shouldn't be dismissed out of hand.

europeforvisitors




msg:1354330
 4:52 pm on Jun 26, 2006 (gmt 0)

Google might end up implementing it badly, or even by forcing publishers into it against their will...

I think that's pretty unlikely. This strikes me as simply being a way to let advertisers reach better-targeted and qualified audiences (as opposed to the current method, which targets keywords only). If it's implemented, it will be good for advertisers, good for Google, and good for some publishers but bad for others.

jomaxx




msg:1354331
 5:11 pm on Jun 26, 2006 (gmt 0)

I think it's unlikely too, given that in the beta you can apparently select what programs to promote, and even use a customized "call to action" to encourage conversions. I doubt Google would allow that if they had any thought of merging the CPA program into their regular CPC/CPM system.

P.S. I encourage everyone (esp. Google staff) to look into the great tools CJ offers to publishers. You can actually see the historical effective CPC of every link available for every program offered by CJ, so that you can base your decision on more than guesswork. Amazing analytical tool, although a strange side-effect is that some CJ merchants consequently get picky about who they'll allow into the program (in order to protect their high CPC).

gregbo




msg:1354332
 8:56 pm on Jun 26, 2006 (gmt 0)

Such large companies aren't likely to commit fraud, no, but they aren't likely to move to 100% PPA either because those kinds of companies need to brand themselves reliably, which can be done better with PPC.

Actually, PPC is poor for branding. It's much better for point-of-sale advertising. Large companies who want to do branding are better off with CPM.

gregbo




msg:1354333
 8:59 pm on Jun 26, 2006 (gmt 0)

one of the points that has already been mentioned in brilliant message #106 is:
there is no way to correctly track sales resulting from your efforts.

CPC is no better in this regard (from the publisher's standpoint of getting credited for delivering a user to a site). A user is certainly free to type the URL into their browser directly, rather than click on the ad. People email URLs to each other, rather than tell them to click on paid links.

gregbo




msg:1354334
 9:10 pm on Jun 26, 2006 (gmt 0)

I just hope it is something we can opt in and out of. I'm not sure which I would do. I'd have to try it, but I want to have a choice.

If it were up to me, I'd allow publishers to accept or deny ads on the basis of how trustworthy the CPA merchants were. Merchants would be scored the same way eBay sellers are. In fact perhaps the score should be passed along with the ad for display, so the users can decide for themselves if the ad is worth clicking on.

ashii




msg:1354335
 9:31 pm on Jun 26, 2006 (gmt 0)

why not Google make a site where these advertisers can sale their items.

This will remove the problem of publishers.

annej




msg:1354336
 10:36 pm on Jun 26, 2006 (gmt 0)

even use a customized "call to action" to encourage conversions.

In that case I imagine the cpa type ads would be in different units and treated quite separately.

While call to action would hurt the advertiser in pay per click, writing something about how great the product is or how it would be a good purchase based on the article on the page makes sense for PPA.

moTi




msg:1354337
 12:10 am on Jun 27, 2006 (gmt 0)

CPC is no better in this regard (from the publisher's standpoint of getting credited for delivering a user to a site). A user is certainly free to type the URL into their browser directly, rather than click on the ad. People email URLs to each other, rather than tell them to click on paid links.

from a technical standpoint, the mere procedure of tracking a click is irrelevant for comparison of the different accounting types.
it is likely, that tracking or circumventing a cpc click is equally feasible to tracking or circumventing a click that starts the tracking history for a cpa paypout. that's why i was not referring to this. you should read more carefully.

have a look at the conditions under which the user successfully responds to an ad:

1. he notices the offer

this is independent from the accounting method. let's assume that an offer is noticed in this case.

2. he clicks

this is a needed condition to get credited both for cpc and cpa. under a cpa environment, a click is the starting point of the tracking mechanism for potentially getting credited. whereas if the user clicks under a cpc environment, the job is done and the publisher gets paid.

3. he buys

this user behavior is only mandatory under cpa conditions.

step two is essential for a cpc payout. steps two and three are essential for cpa to credit the publisher.

conclusion: a cpa payout is dependent on a more vulnerable two-step-procedure. there are the numerous mentioned distortions which hinder a proper attibution of the sale to the advertising effort of the publisher. this was the point i was referring to. there is much more trouble for proper cpa tracking.
but anyhow, my main objections concern the non-technical (because in no case trackable!) issues when a click has already been executed, such as purchases with no tracking history, orders from different access points etc.

moTi




msg:1354338
 12:46 am on Jun 27, 2006 (gmt 0)

better: 3. he performs an action

gregbo




msg:1354339
 10:09 pm on Jun 27, 2006 (gmt 0)

from a technical standpoint, the mere procedure of tracking a click is irrelevant for comparison of the different accounting types.

I was not referring to the procedure of tracking a click. I was referring the the procedure of bypassing the click process, which results in the same result you are complaining about - that publishers are not credited for delivering users to advertisers.

conclusion: a cpa payout is dependent on a more vulnerable two-step-procedure.

Unpreventable click fraud, among other things, makes CPC more vulnerable by advertisers who are concerned about it. The situation you described is an idealized best-case, which does not seem to occur enough that all advertisers are willing to overlook the worse cases.

FWIW, I think CPA has its set of problems. I am not a great fan of CPA. While there may be "more problems" with CPA, there is less infrastructure available to contain and control the amount of fraud that can be perpetrated via CPC, this making it more vulnerable than CPA.

moTi




msg:1354340
 2:27 am on Jun 28, 2006 (gmt 0)

I was referring the the procedure of bypassing the click process, which results in the same result you are complaining about - that publishers are not credited for delivering users to advertisers.

clicks can't be tracked or credited, if they didn't happen. that's not worth mentioning. no matter if ppa or ppc, the click is the starting point here.

i'm talking about the case in which a click has occured. whereas under ppc conditions the case is settled, under ppa conditions the time-span between click and action is vulnerable to numerous technical and behavioral distortions. in consequence the origin of a sale is in part impossible to track, so that the action doesn't get credited to the publisher.

fraud is no less a problem under ppa. the difference is, that the threatening potential is now passed over to the advertiser side. if fraud is committed, it could be even more damaging for the whole reputation of the system because of the worse risk distribution for google and its affiliates.

ok, i think we're finished here. we've worked out the different points of view from an advertiser and publisher perspective.

my conclusion stands:
cpc has shown to be the most convenient accounting method for all parties. in terms of risk distribution located right between cpm and cpa, it ensures the needed balance for financial planning aspects and assures, that none of the parties has to refuse the program to a greater extent. the incredible popularity of adwords/adsense on both the advertiser and publisher side and the resulting huge financial success for google confirms that.

europeforvisitors




msg:1354341
 2:57 am on Jun 28, 2006 (gmt 0)

my conclusion stands:
cpc has shown to be the most convenient accounting method for all parties.

Maybe, but even if that's true, some advertisers will want CPM and others will prefer CPA. If Google can satisfy all three groups of ad buyers (CPC, CPM, and CPA), then it will stand to make more money than if it satisfied one group alone. And--quite possibly--so will we.

alwaysthinking




msg:1354342
 12:32 pm on Jun 29, 2006 (gmt 0)

What about a Hybrid advertising program that combined aspects of both PPC & PPA formats and reconciles earnings to reflect publishers' "marketing effectiveness" to reward CONVERSION? Perhaps this could provide a happy medium that would please and reward all parties, advertisers; publishers & Google?

For Example:

a) Google pays ALL PPC per current AdSense program

b) Google pays PPA per "sliding scale % basis" on items sold (paid via GBuy for tracking), with HIGH ticket items being assigned the lowest but reasonable percentage payout & highest but reasonable payout for low cost items.

c) Google RECONCILES publishers' earnings: monthly deducting ALL PPC earnings from the Total PPA earnings.

If during a given month, a publisher provided no leads which converted into sales for an advertiser, than the publisher would receive ONLY the PPC earnings as compensation for "branding" level of marketing. If a publisher provided a high number of conversions to an advertiser, all PPC earnings would be offset from the Total PPA earnings, leaving the publisher to earn a sizable NET PPA (this assumes that a fair, equitable commission structure has been established by Google).

If the publisher only provided one lead that converted into a sale, the PPA commision amount for that single sale would be offset from GROSS PPC earning, and the publisher would earn the remaining NET PPC earnings from AdSense.

The desired effect of this proposed Hybrid advertising program is that publishers should justly earn more money for leads that convert into sales, but continue to earn decent compensation for their PPC marketing effort (per current AdSense standards).

europeforvisitors




msg:1354343
 1:47 pm on Jun 29, 2006 (gmt 0)

One thing to keep in mind: Different advertisers have different objectives, and not all advertisers are looking for e-commerce transactions. Many (especially in big-ticket categories) are looking for leads that can be developed into sales the old-fashioned way, through personal contact, service, and negotiations. Those advertisers are likely to prefer straight CPC pricing, while a transaction-oriented advertiser (such as an automated hotel-booking service) may have reason to prefer CPA. So, from Google's and the advertiser's point of view, it makes sense to offer pricing options and not just a one-size-fits-all pricing method.

DamonHD




msg:1354344
 3:36 pm on Jun 29, 2006 (gmt 0)

Hi,

...and I like a mix of CPC and CPM to get people to my non-sales pro-bono site.

I'm not currently clear how I *could* use CPA, and I'm sure that I'm not alone.

I'm pretty confident that G will keep all three running in tandem if it takes CPA live, since different mixes of the three styles will suit different advertisers and publishers at different times.

There is no magic bullet.

Rgds

Damon

gregbo




msg:1354345
 7:14 pm on Jun 29, 2006 (gmt 0)

i'm talking about the case in which a click has occured. whereas under ppc conditions the case is settled, under ppa conditions the time-span between click and action is vulnerable to numerous technical and behavioral distortions.

The case is not always settled in CPC. The SE/ad network can decline crediting the publisher if the click is considered invalid for some reason.

fraud is no less a problem under ppa. the difference is, that the threatening potential is now passed over to the advertiser side. if fraud is committed, it could be even more damaging for the whole reputation of the system because of the worse risk distribution for google and its affiliates.

Unless the vast majority of advertisers are fraudulent, the damage should only be limited to those fraudulent advertisers. An advertiser has an incentive not to cheat the system because access to the system improves their overall ability to do business.

my conclusion stands:
cpc has shown to be the most convenient accounting method for all parties. in terms of risk distribution located right between cpm and cpa, it ensures the needed balance for financial planning aspects and assures, that none of the parties has to refuse the program to a greater extent.

Well, there are people who disagree.

the incredible popularity of adwords/adsense on both the advertiser and publisher side and the resulting huge financial success for google confirms that.

Not really. Money has changed hands; some people have profited; some people have been victimized by fraud.

moTi




msg:1354346
 10:26 pm on Jun 29, 2006 (gmt 0)

ok, you want to continue the discussion.. no problem.

The case is not always settled in CPC. The SE/ad network can decline crediting the publisher if the click is considered invalid for some reason.

yes, clicks can be tracked, which provides at least the opportunity of supervision, whereas it's impossible to track the origin and execution of every sale and reward the publisher accordingly. it needn't necessarily be fraud, it's just in the nature of the accounting method.

Unless the vast majority of advertisers are fraudulent, the damage should only be limited to those fraudulent advertisers.

only one fraudulent advertiser suffices to cause huge damage to the whole system as one cheated action is worth hundreds of clicks. affiliates are much more dependent on confirmed sporadic ppa earnings than on a flow of clicks.

An advertiser has an incentive not to cheat the system because access to the system improves their overall ability to do business.

there will always be ways to cheat and still stay healthy in the system. no need to be overoptimistic with advertiser behavior patterns and to idealize the future implementation of a ppa program. more than ever as we only can speculate how google will work that out finally.

Not really. Money has changed hands; some people have profited; some people have been victimized by fraud.

well, there's a dark side of every success story. but overall it seems to work out quite nicely for the largest part of participants. and afaik, the network is still growing strongly.

gregbo




msg:1354347
 10:54 pm on Jul 2, 2006 (gmt 0)

only one fraudulent advertiser suffices to cause huge damage to the whole system as one cheated action is worth hundreds of clicks. affiliates are much more dependent on confirmed sporadic ppa earnings than on a flow of clicks.

I don't see how this can be possible. One fraudulent advertiser cannot bring down an entire business model. In fact if this were true, we would not have any kind of commerce because of money laundering, counterfeiting, etc.

well, there's a dark side of every success story. but overall [CPC] seems to work out quite nicely for the largest part of participants. and afaik, the network is still growing strongly.

Perhaps you don't feel this way personally, but I get the feeling that the existence of CPA makes you nervous. If the above is true, you have nothing to worry about. CPA will satisfy those who want it, and the rest will continue to use CPC or CPM as before.

moTi




msg:1354348
 10:56 am on Jul 3, 2006 (gmt 0)

One fraudulent advertiser cannot bring down an entire business model.

it's not about bringing down the entire business model, but the extent of damage which can be done per single participant.

I get the feeling that the existence of CPA makes you nervous.

cpa already exists since the start of affiliate advertising. it's just that cpa is a seriously flawed accounting method for the reasons given.
whereas you seem to massively support your own (affiliate business) interests, i merely want to express my (publisher) concerns regarding an adsense cpa pricing model. i think this is perfectly legitimate, whereas it seems you have some problems in comprehending the reasons for the arising dispute.

europeforvisitors




msg:1354349
 1:54 pm on Jul 3, 2006 (gmt 0)

I think it's safe to assume that, if Google offers CPA as an option, it will take steps to minimize fraud. Why? Because Google collects a share of the publisher's revenue, and if the publisher gets stiffed, Google will get stiffed, too.

As for click fraud in the CPC model, it's like shoplifting and employee pilferage in the brick-and-mortar retail world: Some theft will always occur, but the business model won't be threatened just because a small percentage of people steal and don't get caught.

Bottom line: As long as advertisers and publishers are satisfied with their ROI from AdSense, fraud is an annoyance, not a dealbreaker.

gregbo




msg:1354350
 10:22 pm on Jul 3, 2006 (gmt 0)

whereas you seem to massively support your own (affiliate business) interests, i merely want to express my (publisher) concerns regarding an adsense cpa pricing model.

What affiliate business interests? I have made arguments against CPC and CPM based on existing technology and the economics of the Internet.

i think this is perfectly legitimate, whereas it seems you have some problems in comprehending the reasons for the arising dispute.

Actually, I have no problems understanding the reasons. I don't agree with them, that's all.

gregbo




msg:1354351
 10:34 pm on Jul 3, 2006 (gmt 0)

As for click fraud in the CPC model, it's like shoplifting and employee pilferage in the brick-and-mortar retail world: Some theft will always occur, but the business model won't be threatened just because a small percentage of people steal and don't get caught.

I don't think the analogy is quite accurate. A more appropriate analogy would be if someone compromised an AdWords account and was able to add funds to it.

Since any business is a potential victim to compromising of its assets, it seems to me that any business that is a potential victim to click fraud is that much more vulnerable.

Bottom line: As long as advertisers and publishers are satisfied with their ROI from AdSense, fraud is an annoyance, not a dealbreaker.

Well, I can't argue with that.

europeforvisitors




msg:1354352
 11:35 pm on Jul 3, 2006 (gmt 0)

I don't think the analogy is quite accurate.

Why not? A shoplifter might steal underwear, an employee a CD, and a fraudulent publisher a click. In each case, the business suffers a loss; in each case, some crooks will get caught and others will get away; and in each case, losses aren't enough to threaten the business model unless they exceed a manageable level.

moTi




msg:1354353
 1:50 am on Jul 4, 2006 (gmt 0)

What affiliate business interests? I have made arguments against CPC and CPM based on existing technology and the economics of the Internet.

at least you defend your very own interests here. you should make that clear before largely talking about "the economics of the internet".
speaking of the economics of the internet: it shows cpc to be the most balanced and accepted pricing method.

gregbo




msg:1354354
 2:04 am on Jul 4, 2006 (gmt 0)

at least you defend your very own interests here. you should make that clear before largely talking about "the economics of the internet".

If anything, "my very own interests" are that people are informed about any and all risks inherent in any business model (CPC, CPM, CPA, fixed fees, etc.)

speaking of the economics of the internet: it shows cpc to be the most balanced and accepted pricing method.

An economic issue being that it is trivial and inexpensive to generate fraudulent clicks that fly under the radar of any tracking mechanism; it is far less trivial to escape detection by stealing from your company, shoplifting, etc.

gregbo




msg:1354355
 2:19 am on Jul 4, 2006 (gmt 0)

Why [isn't the analogy quite accurate]? A shoplifter might steal underwear, an employee a CD, and a fraudulent publisher a click. In each case, the business suffers a loss; in each case, some crooks will get caught and others will get away; and in each case, losses aren't enough to threaten the business model unless they exceed a manageable level.

It is not obvious that a given click is fraudulent. If there is a history of such clicks, they may be fraudulent. Whereas even if someone removes one item from the store, no matter how small or inexpensive, a crime has been committed.

Furthermore, as I said before, any business is subject to crimes, which are much more difficult to pull off than click fraud. However, not all businesses, even Internet businesses, are subject to click fraud. So the businesses that are subject to click fraud are more exposed to losses than those who aren't.

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