netmeg - 3:56 pm on May 13, 2010 (gmt 0)
Somehow I don't think I'm explaining this right.
The Conversion Optimizing has nothing to do with the former quasi-affiliate program the AdWords used to run.
Advertisers have been able to define and track their conversions for years. Maybe even from the beginning, it's been so long I don't remember anymore.
The Conversion Optimizer works for both the Search and Content network. You tell G what the conversion is worth to you, and they will display your ads in the manner that will best net you conversions at or below that amount. You don't specify an actual amount per per click, G determines how much each click will cost based on a number of factors.
I'm pretty sure the publishers get paid per click on conversion optimized campaigns. I suppose it could affect the publishers if G decides that Site A sends traffic that's more likely to convert than Site B, and so pays for clicks accordingly. But this is nothing that smart advertiser isn't already doing for himself if he's paying attention. Google just automates it (and of course, has more data at its disposal)
Nothing is new here except that now advertisers can specify an average CPA that they would like to achieve rather than a maximum CPA. Presumably meaning some are higher, some are lower, but they all average out.
I don't think it has anything to do with relying on the honesty of the advertiser. The advertiser gets to define his conversion, and it's tracked by means of the tracking code on the final page of the conversion. You don't have to use AdWords Conversion Tracking if you don't want to (although I sure do) but I don't think you can run a Conversion Optimizer campaign unless you have tracking enabled.