Google moves ahead with CPA ads

Google is finally planning to move beyond the Google Product Referral Program(read CPA or Cost Per Action) to now include products and services from AdWords advertisers. The referral program which is open for publishers to signup right now, will enable Publishers to search for contextual products to be displayed on their site. Google had been working on testing this CPA based advertising since June 2006.

Google’s move into CPA based advertising had long been expected and demanded both by Google Advertisers and Publishers for a long time now. General perception in the market is that click-fraud rate for CPC based Adsense ad-blocks is much higher than what Google claims to be. With the new referral system publishers will generate revenues only when their visitors click through to an advertiser’s site and complete an action defined by the advertiser, which can include a product sale or even signing up at the site. This process will definitely do away with the click-fraud issue and translate to better ROI for advertisers. As for publishers such actions from their visitors might be much lower in numbers but each action will translate into higher earnings for them.

Like the current Adsense blocks, publishers will have option to  customize look and feel of referral units. Publishers will be able to key in few keywords related to the content of their site and Adsense will  automatically display ads that perform best for the site.

I don’t think Google has disclosed which all advertisers will be participating in this program. I suspect that most of these will be the top merchants that Google is working with in Google Checkout program including Buy.com, J&R, StarBucks Store………..

From the conspiracy theory standpoint, I think Google might have forecasted internally that CPC-Adsense can grow only soo much before hitting the diminishing point of returns. Of course Google is not going to sit and wait for that to happen in another 2-3 years. Hence the move to CPA that effectively drives a new revenue stream while taking care of click-fraud criticism.

Turn and Tumri are couple of startups working in this direction. Jellyfish has been running its CPA based shopping site for the past more than 1 year. Not sure how successful have each of them been.

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3 Responses to “Google moves ahead with CPA ads”

  1. Corey Katir Says:

    The Stigma of Click Fraud and Why You Should Eradicate It
    The stigma of Click Fraud has become damaging to Internet Marketing. The truth is that advertisers are willing that the Internet Visitors click on their ads for any purpose. These clicks have powerful eBranding effects and other advantages even if visitors do not need the products being advertised at that particular time of visit. However, the scare of click fraud in the mind of the Internet visitor and not knowing what click fraud really is has had deep damaging effects. In stigmatic ways, now visitors believe if they click and don’t buy, they have committed fraud. This is the most damaging to the Internet Marketing and eMarketing strategies on the Internet as any past short-sightedness thinking. Remember the early times when people were afraid of Electric Poles in their neighborhood? What happened? Who really benefited? Not the electric companies, but the people.

    I strongly agree with Google that Click Fraud, in terms of the huge magnitude it is projected now, does not exist. Google and Yahoo have developed powerful detection methods that either do not count the extra clicks as click fraud or they totally discount the clicks. Those who are trying to make a big deal out of this issue are either just plain stupid or jealous to Google and Yahoo success. If you ask me, these are the people who have committed click fraud in the past and now are angry that Google and Yahoo have terminated their accounts.

  2. Susan G Says:

    I have frequented your website before. The more I visit, the more I keep coming back! 😉

  3. Susan G Says:

    I have been to your posts before. The more I read, the more I keep coming back! ;-P

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