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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?

 

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.

europeforvisitors




msg:1354356
 5:33 am on Jul 4, 2006 (gmt 0)

Furthermore, as I said before, any business is subject to crimes, which are much more difficult to pull off than click fraud.

You seem to be assuming that most click fraud goes unrecognized. I doubt if that's the case. (Remember that Google, YPN, etc. don't have to recognize click fraud--they merely need to recognize what they choose to define as invalid clicks.)

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.

Sure, and businesses that are exposed to shoplifting or holdups are more exposed to losses than businesses that aren't. But that doesn't keep department stores, convenience stores, and liquor stores from staying in business, as long as the losses are a small percentage of total revenues.

moTi




msg:1354357
 8:35 am on Jul 4, 2006 (gmt 0)

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.)

reading through your comments, one cannot avoid the impression, that your arguments are one-sided. to provide to the people a solid overview of all risks of any pricing model, it takes at least to compare the pros and cons. instead, praising cpa and only linking cpc with fraud proves ignorance. before claiming independence, it is essential to put aside your own bias and broaden your view.

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.

what makes you think that? this is completely unfounded. again: clicks can be tracked, which de facto provides the opportunity to combat fraud. whereas it is impossible to affiliate every sale to its origin, which makes cpa a flawed accounting method in the first place.

gregbo




msg:1354358
 8:21 pm on Jul 4, 2006 (gmt 0)

You seem to be assuming that most click fraud goes unrecognized. I doubt if that's the case. (Remember that Google, YPN, etc. don't have to recognize click fraud--they merely need to recognize what they choose to define as invalid clicks.)

Well, we have only the SEs'/ad networks' word that they are able to recognize what they choose to define as invalid clicks. (Note that this might actually differ from what the advertisers are willing to pay for, which is the ultimate issue at hand here, from a standpoint of where AdSense revenue comes from.)

europeforvisitors




msg:1354359
 8:28 pm on Jul 4, 2006 (gmt 0)

Well, we have only the SEs'/ad networks' word that they are able to recognize what they choose to define as invalid clicks. (Note that this might actually differ from what the advertisers are willing to pay for, which is the ultimate issue at hand here...)

Yes, and the ultimate test is whether advertisers trust the SEs/ad networks to deliver what they've promised (or at least to deliver an acceptable ROI). To judge from the numbers in Google's quarterly earnings reports, advertisers aren't dissatisfied with the network or its pricing model. (Which isn't to say that Google might not offer CPA for advertisers who prefer that pricing method, just as it offers site-targeted CPM ads for advertisers who prefer traditional run-of-site CPM campaigns.)

gregbo




msg:1354360
 8:47 pm on Jul 4, 2006 (gmt 0)

reading through your comments, one cannot avoid the impression, that your arguments are one-sided.

Interesting that you can't seem to take my arguments at face value. I recall earlier in this thread that I said that it is because the money comes from advertisers that it makes sense to argue risk in terms of how it is perceived by the advertisers. If publishers paid for the right to display Google links, then it would make sense to argue risk from the publisher perspective. Furthermore, the risks to CPA were adequately covered; there was no need for me to reiterate them.

instead, praising cpa and only linking cpc with fraud proves ignorance. before claiming independence, it is essential to put aside your own bias and broaden your view.

That CPC is linked with fraud is a proven fact, my own bias aside.

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.

what makes you think that? this is completely unfounded. again: clicks can be tracked, which de facto provides the opportunity to combat fraud.

Regardless, there are unhappy advertisers who want their spend reduced. Therefore things like smartpricing and CPA exist. It's not part of a conspiracy to keep money out of publishers' hands; it's a means to protect advertisers from losing money.

As to the point that there is undetectable click fraud, if you don't believe me, study the Internet protocol stack, architecture, and service model. If after that you still don't believe that there is undetectable click fraud, there's nothing I can do that will convince you. But that won't change anything if advertisers are still spending more money than they think they should. If you can convince them that they have nothing to worry about and should still spend money on CPC, more power to you.

whereas it is impossible to affiliate every sale to its origin, which makes cpa a flawed accounting method in the first place.

I realize this, but this doesn't hurt advertisers. It hurts SEs, ad networks, and publishers to the extent that there is unrealized potential for income. So if the SEs and ad networks don't make enough money via CPA, they'll have to try to convince advertisers that they won't spend too much money on CPC.

gregbo




msg:1354361
 8:58 pm on Jul 4, 2006 (gmt 0)

To judge from the numbers in Google's quarterly earnings reports, advertisers aren't dissatisfied with the network or its pricing model.

These numbers might need to be revised if a court rules that Google must pay substantially more in damages for click fraud then they currently are willing to pay.

(Which isn't to say that Google might not offer CPA for advertisers who prefer that pricing method, just as it offers site-targeted CPM ads for advertisers who prefer traditional run-of-site CPM campaigns.)

Actually, I agree with this. I think customers deserve choices. But the mere existence of the CPA option seems to generate unease among some of you. Witness the people who say they don't want to allow CPA ads on their sites, want to leave AdSense in protest over the introduction of CPA, etc.

dakman




msg:1354362
 10:35 pm on Jul 4, 2006 (gmt 0)

Really Google only needs CPA for their content network (aka adsense sites)... due to the rising click fraud ... I rarely use the content network in my adwords campaigns due to low conversions and irrelevant traffic. Even with targeted keyword lists in adwords at least for me and my clients, the content network doesn't perform well.

The CPC model will continue to work fine on Google Search and the Search Network sites .. What Google should do is continue get users to use Google.com search. On Google search, Google can control click fraud since the traffic is in their domain. Click fraud is rare on google.com search /search network sites since publishers have no motivation to searh and click on ad's on google.com(unless the ads are the publishers competition or something)

I'm glad i dont have to make the decision of CPA or CPC for content network cause its a double edge sword...

Content network CPC = probably 75% or more of google's revenue..

Yet content network results in probably 75% or more of the click fraud / irrelevant traffic reported by advertisers.

Bottomline if Google cuts the cord on CPC for adsense sites... advertisers win, majority of publishers won't make as much as hosting CPC ads (like usual in affiliate marekting). I think if google converts to CPA... many positive benefits will occur for Google including less organic search spam which is mainly from adsense sites ... less scraper sites... publishers will need to focus on relevancy and their content even more to sell advertisers products/services..

europeforvisitors




msg:1354363
 10:55 pm on Jul 4, 2006 (gmt 0)

Really Google only needs CPA for their content network (aka adsense sites)... The CPC model will continue to work fine on Google Search and the Search Network sites

You must have missed the speech by Google's CFO when he mentioned advertiser click fraud (a weapon used against competitors) as a threat to the CPC model. Here's a CNN story from December, 2004:

[money.cnn.com...]

incrediBILL




msg:1354364
 8:08 am on Jul 5, 2006 (gmt 0)

Unless Google are the shopping cart system, there is no way to verify the volume of sales. Merchants (as a whole) will invariably seek to corrupt the tracking of the system.

Considering Google just released GCart it's all starting to fall into place. It's possible they may force people to use GCart to be in Google PPA to stop cookie blocking and cookie washing.

moTi




msg:3010103
 3:01 am on Jul 16, 2006 (gmt 0)

it is because the money comes from advertisers that it makes sense to argue risk in terms of how it is perceived by the advertisers.

for whom it makes sense? certainly only for advertisers and not for google, who just like the publisher base are part of the affected affiliate group. why should google take over the whole marketing risk for free?
you still don't get it. there is more than one player in the game: google, advertisers, publishers, users. equally important.

Regardless, there are unhappy advertisers who want their spend reduced. Therefore things like smartpricing and CPA exist. It's not part of a conspiracy to keep money out of publishers' hands; it's a means to protect advertisers from losing money.

reality catches up with you. yeah, there will always be unhappy people. for example those who want higher earnings or to get rid of mfas or a better landing page experience. that's where ad quality control comes into play. ouch! maybe not exactly an advertiser market anymore.

If after that you still don't believe that there is undetectable click fraud, there's nothing I can do that will convince you.

no need to convince me. everyone knows that undetectable click fraud exists. just like undetectable sales fraud.

gregbo




msg:3011113
 5:24 am on Jul 17, 2006 (gmt 0)

for whom it makes sense?

Anyone who understands the economics of the marketplace.

certainly only for advertisers and not for google, who just like the publisher base are part of the affected affiliate group. why should google take over the whole marketing risk for free?

If it is what keeps their business healthy, they will.

you still don't get it. there is more than one player in the game: google, advertisers, publishers, users. equally important.

I have nothing against publishers. It is just an aspect of this particular situation that publishers do not have as much control over this market as you seem to think. Anyone who disagrees with me could prove me wrong, however -- leave AdSense and convince every other publisher to do so. (Funny how I have heard almost no indication of anyone doing that.)

moTi




msg:3014320
 12:13 pm on Jul 19, 2006 (gmt 0)

for whom it makes sense?

Anyone who understands the economics of the marketplace.

that's arrogant and wrong at once. at this stage of market monetization, it's impossible for google to do without its content network. so they have to please publishers as well. a one-sided approach which only makes advertisers happy will not help.

I have nothing against publishers. It is just an aspect of this particular situation that publishers do not have as much control over this market as you seem to think. Anyone who disagrees with me could prove me wrong, however -- leave AdSense and convince every other publisher to do so. (Funny how I have heard almost no indication of anyone doing that.)

google should have the control over this market for its sake. it would be fatal, if they let advertisers or publishers decide which way to go. instead, they have rightly decided to care for user experience. for this reason they deploy things like smart pricing and landing page quality algorithms. in the recent days, you will have noticed, that they don't shy to clear up their advertiser base.
it's not my intention to leave adsense as i don't see adsense working to my disadvantage at the moment. however, publishers will certainly leave, if earnings are going down and other options promise better chances.

europeforvisitors




msg:3014524
 2:42 pm on Jul 19, 2006 (gmt 0)

however, publishers will certainly leave, if earnings are going down and other options promise better chances.

But the only publishers who'll leave are those whose earnings are going down because of smart pricing, blocking by advertisers who aren't happy with the quality of the traffic they deliver, etc.

If those publishers flee to Yahoo and MSN, it's likely to be a win-win situation for Google: the overall quality of the AdSense network will improve (making AdSense more attractive to advertisers), and Google's competitors will inherit the publishers who are least likely to deliver results for advertisers.

On the downside, Google will lose revenues from the publishers who leave (even if those revenues have been declining), but Google's quality enhancements on the search side over the past 18 months have shown that it's willing to sacrifice short-term revenues for long-term credibility and performance.

gregbo




msg:3015226
 11:54 pm on Jul 19, 2006 (gmt 0)

that's arrogant and wrong at once. at this stage of market monetization, it's impossible for google to do without its content network.

Are you sure about this? Keep in mind that G was a profitable company before AdSense.

so they have to please publishers as well. a one-sided approach which only makes advertisers happy will not help.

They don't have to please publishers who insist that they make as much money as possible even though advertisers are losing money.

europeforvisitors




msg:3015254
 12:25 am on Jul 20, 2006 (gmt 0)

Keep in mind that G was a profitable company before AdSense.

In 1Q 2006, 41% of Google's revenues came from the "content network." So publishers definitely matter to Google.

That doesn't mean publishers get to run the show, however, just as advertisers don't get to run the show. It's like anything else: Sotheby's wouldn't be an auction house without buyers and sellers, but as a respected and powerful intermediary, it gets to set the rules for what gets auctioned and how.

moTi




msg:3015383
 2:50 am on Jul 20, 2006 (gmt 0)

That doesn't mean publishers get to run the show, however, just as advertisers don't get to run the show.

exactly. what we are talking about here is balance. as intermediary, they have to care for every party to keep growing and in order to justify themselves before their shareholders.

similar business models aren't nearly as successful, because of a lack of balance: huge incentives for the one side and minimum earnings/high risk for the other side don't attract enough participants for a healty marketplace.

for sure, every side prefers secure earnings, low risk and pushing off labour to the others - but that is hardly possible to achieve for everyone. what we need is market balance.
in this context, i want you to understand that cpc is the base of googles' success story. no other accounting method would have been capable of attracting both parties in crowds. of course it took a big company to push this through on a market that was dominated by lousy affiliate programs and poor business prospects for content publishers. one cannot disqualify cpm and cpa, but they are and will rather be admixed by-products, whereas cpc likely stays the core product providing the highest total utility.

gregbo




msg:3016578
 10:56 pm on Jul 20, 2006 (gmt 0)

for sure, every side prefers secure earnings, low risk and pushing off labour to the others - but that is hardly possible to achieve for everyone. what we need is market balance.

in this context, i want you to understand that cpc is the base of googles' success story.

The jury is still out on whether all the money that was made via CPC was legitimately made.

no other accounting method would have been capable of attracting both parties in crowds.

This has yet to be proven. CPC is cheap, easy, and fraud-ridden. I imagine its current success is primarily a property of the first two. Whether the latter will have an effect, we will find out eventually.

of course it took a big company to push this through on a market that was dominated by lousy affiliate programs and poor business prospects for content publishers. one cannot disqualify cpm and cpa, but they are and will rather be admixed by-products, whereas cpc likely stays the core product providing the highest total utility.

Ultimately the marketplace will decide. But I don't believe that the risks of CPC are fully understood. When they are fully understood, ie. when any advertiser or publisher (or for that matter, investor) can pick up an easily understood document that details the actual risks of CPC fraud vs. the others, then we will be able to say which business model will prevail.

europeforvisitors




msg:3016595
 11:15 pm on Jul 20, 2006 (gmt 0)

I can't remember if this was referenced earlier (I'm not re-reading every page of a 17-page thread), but Webmaster World recently had a "featured home page discussion" titled "Study: Click fraud could threaten the pay-per-click model":

[webmasterworld.com...]

A couple of quotes from that thread:

There are problems with the CPA model as well. It's difficult for us to measure the exact impact of click fraud, but 15% sounds like a pretty reasonable estimate. On the other hand, our affiliate program generates about 50% bogus leads.

14% [the study's estimated rate of click fraud] is the cost of doing business. If it stays at that rate, I don't see it as a major problem.

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