Google announced today that they will begin testing Pay-Per-Action ads, better known in the webmaster world as Cost Per Action (or CPA) advertising and, in holding true to their oh so obnoxious style, it’s a limited beta test. Two of the industry’s top blogs, Marketing Pilgrim and Search Engine Land have already covered the announcement and covered it well. So in the spirit of Michael Grey’s recent rant, rather than rehash what they’ve posted (a practice I’ve never been a big fan of), I’d like to highlight some details that will put to rest the three (so far) most common objections to Google’s new Pay-Per-Action advertising model.
The first detail I’d like to highlight is from Google’s FAQ on the new PPA program.
“Where will my pay-per-action ads appear?
Your pay-per-action ads are eligible to appear on publisher sites in the Google content network. Publishers can choose to place specific pay-per-action ads in new ad units that they create, or allow us to serve the highest converting pay-per-action ads that are related to a topic that they choose.”
The words that should immediately be jumping off the page for you are “content network.” Google divides their ads into two different categories, depending on how they are found. The first group is served via the Search Network which, as the name suggests, display when someone does a search on Google. These are the ads in the blue highlighted box at the top, or down the right hand side of the screen. The second group is served via the Content Network which is Google’s network of affiliates that publish ads on their own sites. Basically the Content Network=AdSense.
In the recent months, more and more advertisers have finally begun listening to what experts have long been saying, and opting out of the content network due to the incredibly poor ROI. In response, Google has begun introducing new methods to help advertisers improve their content network experience. The ability to hand pick specific sites to place ads on as well as the announcement that advertisers will soon be able see where their ads are being displayed have both been geared toward more advertiser control in hopes of improving the content network’s ROI. So it should come as no surprise that, at least initially, the PPA advertising model will only affect the content network.
The second detail that many may have missed comes from the AdSense Blog.
“While we plan to open this up to all publishers in the near future, this update is currently only available on a limited basis as part of our beta test. If you are interested in being one of our beta testers, please visit the referrals beta site and sign up.“
As you can see, current AdSense publishers have to sign up to publish these new PPA ads. This statement should go a long way towards swaying those that believe Google is once again screwing their AdSense publishers. While that would certainly be nothing new, I don’t think publishers are getting a raw deal on this one. Give it a shot and if the offers don’t convert and you don’t make as much money, just switch back. That seems fairly straight forward.
The last concern that seems to be cropping up a lot of places is that of “free advertising.” What would happen for example if an advertiser created Pay Per Action ads that he knew would never convert? He’d presumably get free traffic to his site and would never have to pay for any of it. While I’m sure Google has already thought of this issue and likely has methods in place to deal with this type of underhanded activity, there is also a bit of protection built into the CPA or PPA advertising model. Once again, from Google’s FAQ:
“How do publishers choose my pay-per-action ad?
When you create a pay-per-action ad, you’ll enter a series of terms or phrases that will describe your product or service to website publishers who are part of the Google content network. These terms or phrases will trigger your ads to appear when a publisher searches for ads within their account. Publishers also have the option to browse (by product category or view entire advertiser inventory) through ads rather than searching.”
CPA advertising is nothing new and neither is the idea of scamming free traffic through impossible to complete actions. So what keeps advertisers from taking advantage of poor unsuspecting publishers? It’s simple. Publishers get to choose the offers or ads they want to promote. Google’s PPA publishers will be able to look at each and every single step that is required for a conversion. If someone has to buy 3 products, refer 7 friends who have to buy three products themselves and do 10 cartwheels all before the publisher gets paid, how many publishers do you think will decide to promote that ad? Affiliate marketers and publishers are in the game to make as much money as easily as possible and are some of the savviest people on the web. I’d be willing to bet they’ll police the offers better than any programmed methods Google might have come up with.
Will Google’s new Pay-Per-Action program be perfect? Certainly not, but I believe these three concerns can be safely laid to rest. And, as readers of this blog can attest, that comes from someone who is about as far from being a Google apologist as you can get.
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