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Google Launches Cost Per Action AdSense
rustybrick writes "Google has launched an invite only test of CPA (cost per action) AdSense ads. So instead of getting paid per click or per impression, you now can get paid for an action, such as a sale or lead referral."
The point of sale or is right where the money is, so it makes sense to test the market with it. I'm sure that Google would deem a direct referal to a sale to be worth more too. It will be interesting to see how the revenue for the publisher and the costs for the marketer woulr work out.
Working at a company that manages pay-per-click ads, pay per action is something we've been waiting for a long time to come over the horizon. I'm so glad Google's rolling it out, even if it is only on a test basis.
"Clicks" are abstract concepts and very difficult to sell to less tech-savvy business people. They want a better measure of their return on investment for their ad campaigns. A number of companies offer call tracking, which is easier for businesses to grok . . . but a call != a sale . . . or even an actual lead.
This is a welcome step in the right direction, IMHO.
How do I trust that the advertisers will accurate report sales generated by my leads?
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I still don't get it! (and sorry for nagging about it, again) Is there a single Slashdotter here who clicks on ads? (assuming you haven't got them filtered (thank you, Firefox extensions)) I'm not sure I have even done it for experimental purposes. I _never_ do it. Not the flashy ones, not the discreet text ones. Why would anyone do it? If you're looking for something, you go get it. If not, you don't want anyone telling you to go get it. Gah, giving up control of yourself like that!
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The problem is: most people on /. either know how to use Adblock (and thus don't see this kind of bullshit), or show ads themselves (being on the webmaster's side of the deal and thus being a part of the problem themselves).
For now, the "mere mortals" cope with the problem, just like they accept Windows and spyware, but with more than 33% of all http requests being relate to adverts, the situation just goes worse and worse.
Those who win: Google and advertisers.
Those who lose: users and network providers.
The current state of net advertising is that someone else is paid for stealing your time and your bandwidth.
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That's exactly what I was thinking.
With a pay-per-click I don't really care what gets advertised on my site as long as its relevant to the content of the site (which, thanks to Google, it is). I'm getting paid for sending folks there way.
With a pay-per-action system, I'll have to care about what gets advertised on my site, because if no sale is made, I don't make any money. So I'm not going to want to advertise (say) $3,000 hottubs, because even if it does result in a sale, its probably not going to be purchased immediately after follwing my link. Likewise, I'm not going to want to advertise for sites that make it difficult to make purchases or don't effectively sell their products.
And when you think about it, why shouldn't I be paid for helping spread brand recognition, regardless of the immediate results? Billboard space isn't leased based on the number of people who make a purchase after viewing the billboard. It is leased based on the number (and demographic) of people expected to see it.
Well, since the CPA ads are in a separate pool... will this pool also work in a similar way as the "other" pool, as in, that the highest-revenue ads are the most likely to be picked?
If this is a case, an advertisers who frauds will logically be picked less and less, so the damage done will not be that big. Something along this line sounds like a "natural" solution to the problem, /me thinks..
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I'm more worried about the 3rd party advertiser committing fraud, since that is basically all Commission Junction seemed to be back when I tried it. I paid lots of good money to sign up for a service where 3rd parties would place ads linking to my website on their webpage via CJ, but almost every single sale that results from that channel was the 3rd party themselves using a stolen CC and placing an order so that I pay CJ, CJ takes a cut of the money, and the advertiser who placed the fraudulent sale gets a cut of the money, then I get stuck with a bunch of chargebacks. CJ really didn't have any incentive to stop that kind of behavior, or weed those people out, since they still get a cut of all the sales themselves either way.
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If everyone blocked ads you'd have no internet to block ads from.
I do click on ads, for some sites I like a lot I make sure to follow ads every now and again. But mostly I click on an add if I find the content interested, so very targeted ads are more likely to reach me. Interestingly I'd say the site I visit ads from most often is Penny Arcade, and not just out of support but because I am interested.
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Then what do you does Google do with all the stuff they just bought? Return it? That doesn't sound like an attractive proposition for online retail stores.
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This is one of the least insightful posts I've ever read. Yes, sales make money; this is true. "It will be interesting" ok, anything else?
It already does work better than per-click for many reasons. The porn industry switched from per-click to per-sale, for the most part, about 5 years ago. Of course, as always, the porn industry online is ahead of the curve.
You're worrying too much. Google has just as much interest in receiving revenue from the advertising placement as you do. If someone posts an ad for $3,000 hottubs and the conversion rate is excessively small, Google won't want to display the ad either. Instead they'll display an ad that's more likely to result in conversion, and you'll both get to prance around in happy land.
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Most internet users look at different sites and compare before making a final decision to purchase something. Anyone that has a website with shopping carts that allows users to save should know this -- users come back later or don't come back at all and THEN they buy. If it's a shopping cart model, then you could store the referrer as well (google), but the question is, what else do you store? What they searched for? Does google get a flat fee if they come back to the site and buy something different? What if you don't have a shopping cart save, or they come back 10 days later for something else -- does google get the money because they ONCE visited the site via an ad???? Charging by action isn't just technically complicated in terms of integration and compliance, it's logically a fuzzy area -- between the cost of integration and the increased visibility google would have into the businesses (think wal-mart and its supply chain), many sellers may resist this model. Marketing is a process, not a one shot deal, and suggesting that a single ad is actionable is inflates the importance of a small part of the whole process of building a customer relationship and a brand and selling products.
Fraud detection is actually much easier with actions than with clicks. Sure, there will be some credit card fraud, but no more so than any other retail transaction.
All I have to say is that companies who resort to 'fraud' aren't going to be fooling anyone for very long, and in the long run they will only hurt their own reputations.
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