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?
Keniki
They will get traffic which will be so disgusted with the 'Sign up' requirement ( Defined lead )on the MFA landing page, so they will CLICK the adSense ads to get out. Wow! Free TRAFFIC for MFA's.
$$$$$ for MFA 's ... NOTHING for PUBLISHERS... :-(
This could really HURT publishers.
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.
For some sites/affiliates yes, but the successful ones won't consider switching to this program. It sounds like CJ's ill-fated LMI that was resoundingly rejected by affiliates.
If you have a content site and you just want to serve ads and hope that somebody buys, this is the program for you. If you are good at selling stuff, this is not going to be the program for you.
It is not my fault:
A. Their site is a wreck, virtually impossible to find anything
B. Their shopping cart system was designed by a three year old child
C. Their customer support team was cultivated from 12th grade afternoon detention
D. Their products are overpriced
E. Product descriptions are overly inadequate
F. Their products are worthless
G. Their website fine print conjures up images of a dark crack house and the distinct impression the visitor will catch something that won't wipe off.
So, why should I give them space on my site, where they squat, pay me nothing, while they try to propell a 'brand' that shouldn't be on the web to begin with?
Take for example company A. Company A has an affiliate program with a major third party. They are a major company, with a fine product line. Upon arriving at their website, I am very impressed, Until I begin to add things to my cart, which will total over $360 by the time I am done.
This process has taken me an hour, though I am short on time, I love the product, I endure a website that goes to "the page can not be displayed" using my lightening fast internet connection, at a painfullly slow pace, more than a dozen times. Finally, I quit. I abandon my cart, never to return.
I do not call customer support. They have wasted enough of my time with their joke of a shopping cart system. I have wasted an hour. Later, they snail me, and ask if they can help me. Paper spam. Lovely. I don't think so. I shop online. Period. Take your paper goods and stick them in your own shredder. My local landfill has enough.
This company does exist, I am (now past tense) an affiliate of theirs, have been for many years. Only recently have I decided to visit their site and attempt to order from them. It is no wonder I have never made a cent from them over the years. They can't close a deal online, they close it via snail mail, and I don't get credit. Or like me, people refuse to go to that much trouble to order, with so many really savy ecommerce sites to choose from.
HOWEVER, they are also an Adsense advertiser now, and I have made a bundle off my visitors clicking on their ad in recent months. This is the way publishers need to be compensated, cpc.
They take up my space, skirt away my visitors, and should pay me for the click. Because almost certainly, they will muff up the transaction once they get to the advertiser's site and I will never make a cent on ppa. This comprises the mother load of those who will (have always) love(d) ppa.
Do I feel bad that I send my visitors to their site to browse, knowing fully well there will be no sale? No. I am doing a public service by letting the world know the company has no business being on the web to begin with, and driving them off the web, just asap. This will leave all those really savy ecommerce companies in the cpc pool, who can take that click, and make a sale on a great product, with great customer service.
This is my experience with ppa in the past seven, going on eight years. Many of my zero performance ppa partners are now Adsense partners. Finally, I am making some money. Of the over 1,500 affilate programs I have joined over the years, less than one dozen ever earned me a cent.
I put red widget ads on red widget pages, with search engines sending me traffic comprised of red widget lovers, big widget ads on big widget pages, upside-down widgets on my upside-down widget pages... a perfect scenario . I had the targeted traffic, they had the target product. But, because of incompetence on their end, all I really had was pretty site decorations.
PPA? *snicker* I think not. I will leave them for the newbie webmasters with the twinkle in their eye... such as I had way back when Alta Vista was king.
It sounds like CJ's ill-fated LMI that was resoundingly rejected by affiliates.
exactly, and from what I saw on the adwords blog, these links are going to be affiliate unfriendly (for me at least) javascript like the LMI links were supposed to be.
many adsense publishers have tried affiliate selling and saw how credit for conversions can be stolen by parties like ebates and other "loyaltyware", by adware/spyware, by others who manipulate cookies by loading 1x1 pixels that set a conversion cookie and much more. in the cpc environment, these risks are on the shoulders of the advertiser, not the publisher. in a ppa environ, the publisher now has the majority of this risk. and if you're thinking that action based payments will cure click fraud, which party are you referring to, who now gets "protected"? the advertiser or the publisher? the advertiser only pays for actions, their risks go way down. but risk doesn't just disappear, it gets shifted. in addition to the obvious tracking and payment issues I mentioned above, as a publisher, do you think nefarious commission thieves will sit by knowing that a conversion click registered in millions of G cookies awaits their trickery?
i don't think the ppa is worse or better than the ppc model in general, but there are two glaring issues publishers need to consider - risk and volatility. risks are clearly shifted to the publisher in this model, and because payments for an action click will be ~20-50 times higher than a ppc click, the revenue stream isn't nearly as smooth (think about how many actions you'll need to test things properly in a ppa environment versus a ppc setting, and the 30 day lag time you'll need to account for in analysis as well).
~20-50 times higher makes a VERY attractive target for fraud!
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Q: 20-50 times higher? rhinofish, you're nuts!
A: if a merchant pays $1.00/click for 100 clicks, they spend $100 in ad spend for 100 clicks/visitors. If they convert at 3%, they get 3 sales. If each sale generates $50 profit, they'd have $150 in total profits before ad costs. After ad costs, they'd have: (3 x $50 profit) - $100 ad spend = $50 overall profit. If they pay, ppa style, for sales actions only, what would they be willing to pay to achieve the same profit/spend in the ppa scenario? They were willing to spend $100 to get $150... if they offered $33 / action, they would still spend $100 to get $150 - that's 33 times higher than the $1/click. In the ppa model, they'd have much less risk than before (the publisher holds the majority of risks), so they might decide to push even harder - perhaps $45-$50 an action, knowing that cookies, returns and all the other pitfalls in their previous ppc numbers were risks that are now shifted to the publisher...
dohh.. here comes the complexity and unknowns. What happens if the purchase is fraud? What happens if they return the merchandise? what happens if there are chargebacks? I thought CPA/PPA or whatever they call it these days was dying a long death because of these hot points.
I expect Google to tie their CPA program into Google Checkout at some point. This will give them more control over potential Fraud on the Advertisers side. And it will promote the usage of Google Checkout with more sophisticated ecommerce players who have resisted adding extra elements of possible confusion to their optimized check out process. I doubt offering an incentive on the Adwords program is enough to get most of the big players to tie Google Checkout into their carts.
I personally wouldn't be surprised that, if this beta proves fruitful, Google supplies some sort of Form toolset to be inserted into pages for CPA's tied to leads, etc. That way they keep a tighter reign on the process A to Z.
P
1) My content sites don't generate sales. Visitors are there for the content. They are not ready to buy, they are not even thinking of buying. There is nothing in PPA for me on those sites.
2) My affiliate sites have been nerfed by Google for years. Can they continue to sandbox aff sites when the aff networks are their direct competitors? How does Goog justify that? I'm sure they won't bother to do so.
3) My sales sites generate commissions for me, and me alone. Why in the world would I split my commish with Goog? Will they send me the traffic if I do so?
4) Amazon is already trying contextual PPA with their Omakase ads. I've seen poor results from this on my content sites.
As a publisher, I see nothing in this for me.
We have quite a few eccomerce sites where average sales are between $1000-$2000. We would be willing to pay out 5%. So that means google and the publishers would split $50-$100 per transaction. Since the sites have about 10 transactions like that a day, thats a total of $500-$1000 a day.
Publishers would love 1/2 of that pie. Imagine if you were a publisher and getting between $250-$500 a day for sending us converting traffic......
Lets see, that means as a publisher you could make $91,250-$182,000 per year just from our site. Google would make the same.
Currently, that site spends about $12,000 in adsense ads a year.
See the difference?
Regardless of some bugs, google adwords has a great conversion tracking system. Even if they miss 10% of the transactions, would the publishers and google really care?
Currently $12,000 total for adwords
New advertising $364,000 - 10% = $327,600 in pay per action
We do not spend more than $12,000 a year in adwords currently, because there are very few publishers who write articles about our products. Limited adspasce! If there was a huge incentive like this, one or two publishers might create sites that would target our products and send us traffic that we miss in the natural serps.
MFA's Scrapers and the rest of the filth that has plaqued the adsense system for years are going to be toast. Real publishers like us with high quality, high converting traffic will finally see the true rewards of our labor.
Accordingly so will advertisers who only have to pay per transaction, this will lead to higher payouts for publishers as the advertiser can now focus his/her ad budget to only publishers that are converting with no risk.
This is just a pure win/win for both sides.
