Forum Moderators: martinibuster
(Unless it's all patented up, which could be a problem)
For those who don't want to let google know what they want to pay per action, then they're welcome to do a flat bid and see where that gets them.
I think it's pretty obvious that it's all going to move towards PPA/CPA, pay per action / cost per action.
Or it could go the other way, toward CPM, with advertisers knowing they'll always have some "waste circulation" just as they do with radio or TV.
One major flaw with the CPA approach is that publishers wouldn't use ads on pages where they could make more money from direct affiliate relationships. Right now, the guarantee of earnings from AdSense clicks can help to offset the higher return (albeit with higher risk) of affiliate sales. Without that guarantee, many of us would be much more selective about where we'd place AdSense code on our sites.
If you think Google has a fraud problem now, imagine what it would be like if a zillion advertisers had to be trusted not to lie about their sales and commission obligations. (Think of a Commission Junction with hundreds of thousands of merchants and a revolving door.)
the guarantee of earnings from AdSense clicks
The guarantee? What guarantee? Do we read the same adsense forum?
And there isn't much 'radio' fraud or TV 'fraud'. A tv or radio station could over report their customers, but they couldn't suddenly charge more for a commercial beacause you pay up front for the spot.
With PPC you pay as you go. Yeah, CPM would be OK if I could say "I will pay X as long as I am the ONLY Ad shown on this website between the hours of X and X".
That would work. That way I could guarantee that I have the undivided attention of the website users during those times and little potential for fraud (like showing other ads to better customers).
There are so many reasons, however, why this is unlikely. For one, you can't optimize according to the type of traffic and what they are doing. Not unless you make the bidding process that much more complicated.
It's also a static price. Having a price which is dynamic according to traffic is a much more intelligent and flexible system.
And EFV, we have this conversation over and over and over again.
If they do not PAY they do not PLAY.
They're going to honestly report (probably even OVER report) their sales because otherwise their bids will be too low and their ads will not get circulated.
I think it already pretty much has. This is what "smart pricing" is.
Unfortunately, Google needs to ensure that it's data set it's doing smart pricing on is accurate data. The only way to do that is to be confident when people are using conversion code and when they're not.
I mean, for example, I have conversion code working for some of my campaigns and not for others. Does this mean I'm not going to place? Does it mean that publishers who are placing ads for the campaigns with conversion code are getting screwed while the others aren't?
Who knows. There needs to be an economic incentive for the advertiser to ensure that his conversion code is working efficiently. Otherwise, the data set is probably pretty volatile.
Who knows. There needs to be an economic incentive for the advertiser to ensure that his conversion code is working efficiently. Otherwise, the data set is probably pretty volatile.
Actually, the data is useless for its intended purpose.
The guarantee? What guarantee? Do we read the same adsense forum?
If a user clicks on an AdSense ad, the publisher gets paid. That's guaranteed, unless the click is deemed invalid.
And there isn't much 'radio' fraud or TV 'fraud'.
I used the term "waste circulation," not "fraud." (In radio and TV, "waste circulation" is what happens when a radio plays a commercial but the supposed "listener" isn't listening, or when a TV spot appears while the viewer is in the bathroom, in the kitchen, or on the phone.)
Waste circulation is waste circulation, whether it comes in the form of listeners who don't listen, viewers who don't view, or click fraud.
As for the suggestion that Google would trust advertisers not to cheat, count me among the skeptical. (Merchant fraud is a perennially hot topic on affiliate forums, and if you think publishers are skeptical about Google, wait until they're expected to trust untold numbers of no-name advertisers in countries around the world.)
In any case, AdWords/AdSense are PPC products, and switching to CPA would be a huge change of business model, not to mention logistics--more so than offering a CPM option, an idea that reportedly was brought up in an advertiser survey a while back.
If a user clicks on an AdSense ad, the publisher gets paid. That's guaranteed, unless the click is deemed invalid.
Gets paid how much? If you're guaranteed to get paid 5 cents for a click, I guess that's something to someone, but that's not a very exciting guarantee to me.
And who says a click is going to be valid or not? How is that a guarantee if Google can just deem it invalid?
And what about PSAs? Do you get paid for PSAs?
As for the suggestion that Google would trust advertisers not to cheat, count me among the skeptical. (Merchant fraud is a perennially hot topic on affiliate forums, and if you think publishers are skeptical about Google, wait until they're expected to trust untold numbers of no-name advertisers in countries around the world.)In any case, AdWords/AdSense are PPC products, and switching to CPA would be a huge change of business model, not to mention logistics--more so than offering a CPM option, an idea that reportedly was brought up in an advertiser survey a while back.
Huge change?
AdSense *IS* a CPA model. Smart Pricing (you are paid according to how well your converting) is *ALREADY* CPA.
If you were paid according to how many clicks you did and that was it, where the amount of converting was not a factor than that would be PPC.
But that's not how it works. Smart Pricing makes it so you are paid to how well you are converting. You are getting paid according to conversions. Which are customer actions. Thus, you are paid per action (PPA).
I know I'm sounding repetitive but what in the heck am I missing here?
The problem with smart pricing though, is that there is no economic incentive to ensure that the advertiser is properly reporting all conversions that are occuring.
Thus smart pricing is not as smart as it could be.
The only "change" to the business model is to tell advertisers that if they want to get good placement on AdSense pages to make sure they are reporting their conversions correctly.
This wouldn't even require a change to the UI. It probably wouldn't even require a change to their backend!
Sigh. I guess this is all so obvious to me because I am both an AdWords and AdSense participant so I see it all very clearly from both sides.
Smart Pricing makes it so you are paid to how well you are converting. You are getting paid according to conversions. Which are customer actions. Thus, you are paid per action (PPA).
No, you're paid according to Google's estimate of how well clicks from your pages (or your type of content) are likely to convert. Conversion tracking may be one factor in the smart-pricing algorithm (for example, it may be used to acquire data that can be used for statistical models), but it isn't used across the board.
I know I'm sounding repetitive but what in the heck am I missing here?
The fact that not all advertisers use Google's conversion tracking, and Google would be limiting its market if it tried to become a Commission Junction with contextual text links.
The fact that not all advertisers use Google's conversion tracking, and Google would be limiting its market if it tried to become a Commission Junction with contextual text links.
Which is exactly why Google's "estimates" of which pages are likely to convert are so far off the mark.
