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Pay-per-action advertising is a new pricing model that allows you to pay only for completed actions that you define, such as a lead, a sale, or a pageview, after a user has clicked on your ad on a publisher's site. You'll define an action, set up conversion tracking, and create ads that publishers in the Google content network can then choose to place in new ad units on their site. Let's run through the details:
Is it me, or does that sound like an affiliate program model?
Sounds good. More options for advertisers means more advertisers will signup! Right now folks that want a CPA model are going elsewhere for it... Google can reel those advertisers in, bring more ad dollars to distribute to the Adsense network.
I get a lot of affiliate-program inquiries, and I say "no" to many of them simply because they're too specialized to be of interest. If I have 5 low-traffic pages on Elbonian raft cruising out of 5,000 pages on the site, it's unlikely to be worth the hassle of signing on with Elbonianraftcruises.com and waiting to accrue enough commissions to get a check. On the other hand, if I could rack up commissions on a whole bunch of minor subtopics through AdSense, an AdSense CPA model could be interesting.
Also, let's not forget that Google isn't just talking about affiliate-style sales commissions. The advertiser can define "conversion" in a number of ways, and in some industries, pay-per-lead is more important than e-commerce transactions.
If I wanted CPA ads, I would join a CPA network. I cannot see why any pubs would be interested in this. Can we opt-out?
I'm guessing it won't be necessary to even worry about opting out. Historically Google delivers the best performing ads/types to your site that pay the best, since that benefits both parties (G and the publisher).
So if the CPA model is tried and shows it is not paying more than the CPC ads on your site, I'm guessing G will swap you back automatically. If you make more with the CPA model, more CPA ads will show. Etc.
Perhaps I'm too optimistic... =)
But if I were a publisher I'd be a bit reluctant for my income to rely another site's ability to convert. I wonder if publishers will be able to choose advertisers, or if conversion rates will be part of a new kind of quality score?
As a publisher, I'm a little disappointed. The program looks more like Commission Junction than AdWords/AdSense. The publisher has to select the ads and decide where to put them. The ads don't compete with auction-based (AdWords/AdSense ads), either.
I'd be more interested if the ads were contextual and served automatically by Google.
Advertising and affiliate marketing are two very different things. Affiliates sell stuff and have control over almost all aspect of the way they do that, advertsing is generally much more passive. Will affiliates have control over the way these PPA ads are used or will it just be like slapping up a block of AdSense ads on the site?
It also brings up another question. At what point do advertising mediums and good content sites start to vanish because the advertising they run serves to brand, to build awareness & to educate but does not lead to immediate sales?
slapping up a block of AdSense ads on the site?
Thats what it looks like to me. I think I'll stay with the aff networks I'm using now. (that pay me many 100's of times what adsense ever has..)
Google Introduces Pay Per Action
[edited by: simey at 8:00 pm (utc) on Mar. 20, 2007]
If advertisers cannot break-even or profit from clicks on a publisher's website, eventually there will be no next/greater fool to take a chance and advertise on the publisher's website.
So, if a publisher can't get any advertisers to pay per click for contextual ads, they should be grateful that the CPA system gives them an alternative method of generating revenue.
If anything, this makes CJ more valuable as people will realize the low quality of G's Content network and reaffirm the better value of CJ's affiliates.
IMHO, that's pretty farfetched. The vast majority of CJ's affiliates earn very little for themselves or for CJ merchants. In other words, the CJ network is a lot like the AdSense network, the main difference being that CJ advertisers get a lot of free branding from affiliate ads that don't perform.