Google Launches Pay Per Action (CPA)

I’m not going to rehash my previous post on this topic (still highly applicable – I highly recommend reading it before continuing with this post), but Google has finally launched Pay Per Action across their Adwords Network for US advertisers onto Adsense (not Search Network yet). I still believe that there are severe problems with the model, and Google will discover that it is not sustainable.

Search Engine Watch believes that Commission Junction’s days are numbered – I don’t think so! Andy Beal also has a similar view. We’ve been running CPA campaigns through Google for nearly 4 years now, and I think Google vastly under-estimates the risks and relationships at play with CPA marketing. The biggest concern though, is that Google’s internal arbitrage of CPC to CPA (which is what they’re doing, effectively), pushes prices CPC prices up in the short term, while they make mistakes that we’ve forgotten how to make, in our Clicks2Customers business.

Also, from the Inside Adwords blog, it’s not clear how they will deal with chargebacks – I’m guessing that the merchants have to factor this in? Can you imagine what’s next? Click-Order-Return (COR) fraud (i.e. Website owner clicks a merchant, places an order – merchant pays Google, Website owner returns goods – Google doesn’t refund merchant and Google pays Adsense site share of CPA). What if I’m a Google stockholder and I make a $1m purchase in order to boost the earnings, and then return or cancel the order – in theory, Google still gets paid and their stock goes up, but the merchant is out of business – just summising here, but I still don’t think CPA is viable for Google.

As I said in my previous post on this topic – Google has a smart bunch of guys, and I’m sure they will figure it out!

Comments

  1. Attention- What Google CPA Really Means……

    The answer is right in the title… Google (NASDAQ: GOOG) has added yet another beta service, Google CPA, for advertisers and for Adsense publishers to deploy. We all knew it was coming, but no one really knows what it means. There has been a lot of pr…

  2. Attention- What Google CPA Really Means……

    The answer is right in the title… Google (NASDAQ: GOOG) has added yet another beta service, Google CPA, for advertisers and for Adsense publishers to deploy. We all knew it was coming, but no one really knows what it means. There has been a lot of pr…

  3. [...] And Scott should know, he worked for Befree for years and is now a successful affiliate himself. Another super affiliate, Vinny Langham aggress, I’m not going to rehash my previous post on this topic (still highly applicable – I highly recommend reading it before continuing with this post), but Google has finally launched Pay Per Action across their Adwords Network for US advertisers onto Adsense (not Search Network yet). I still believe that there are severe problems with the model, and Google will discover that it is not sustainable. Source: Google Launches Pay Per Action (CPA) [...]

  4. Techcrunch has some coverage on this as well:

    http://www.techcrunch.com/2007/03/21/digesting-

  5. Runa says:

    This is an important new. Now it’s interesting to see if (and how) it could increase publishers incomes.

  6. Runa says:

    This is an important new. Now it’s interesting to see if (and how) it could increase publishers incomes.

  7. will says:

    COR fraud will be treated like click fraud. . . priced into the system for advertisers but depresses return for publishers . . . not a good result, but didnt stop CPC either . . .

  8. will says:

    COR fraud will be treated like click fraud. . . priced into the system for advertisers but depresses return for publishers . . . not a good result, but didnt stop CPC either . . .

  9. [...] This limited test is not very exciting to us primarily due to the limitation of it contained to the content network, which we use for only a small percentage of our client’s budgets. However, it should be very scary to the affiliate networks such as Commission Junction and Linkshare, because Google is acting as the intermediary connecting advertisers and publishers. With their reach and technical prowess, I don’t think anybody doubts that they could become overnight players in the affiliate network marketplace if they make this a strategic push. Granted, there are some major issues to over come such as handling chargebacks and while click-fraud becomes a moot point, lead fraud and purchase-and-return fraud all become new beasts to tackle. But give Google credit: if Commission Junction has the resources to address these issues, Google certainly does as well. [...]

  10. Jay says:

    As far as I know a good number of CPA programs already eat the cost on refunds and if not right now you certainly don’t get any money back when an order gets refunded that came from your adwords spending so I really can’t see this becoming a huge issue, considering that your taking most of the risk out of advertising everywhere and paying for non-converting clicks..

  11. Jay says:

    As far as I know a good number of CPA programs already eat the cost on refunds and if not right now you certainly don’t get any money back when an order gets refunded that came from your adwords spending so I really can’t see this becoming a huge issue, considering that your taking most of the risk out of advertising everywhere and paying for non-converting clicks..

  12. geri says:

    As a self described “white hat SEO professional I have never used PPC programs. It’s kinda like it’s a religion taboo, if you will… However, I think PPA is the wave of the future. I have been waiting for this natural progression to occur.

    I have always considered paying for a visitor to be a waste of time. I’ve clicked on lots of sites never intending to buy anything. So paying for visitors made no sense to me. However, paying when someone actually pay is just another cost of doing business and I CAN LIVE WITH THAT.

    Since I have never used AdWords I will have a long wait before Google’s PPA becomes available to me… Oh, darn….

  13. geri says:

    As a self described “white hat SEO professional I have never used PPC programs. It’s kinda like it’s a religion taboo, if you will… However, I think PPA is the wave of the future. I have been waiting for this natural progression to occur.

    I have always considered paying for a visitor to be a waste of time. I’ve clicked on lots of sites never intending to buy anything. So paying for visitors made no sense to me. However, paying when someone actually pay is just another cost of doing business and I CAN LIVE WITH THAT.

    Since I have never used AdWords I will have a long wait before Google’s PPA becomes available to me… Oh, darn….

  14. DavidC says:

    Google is now ending CPA… it sort of worked for me, they should have released it to the public. Converting fraud was the problem I guess… it happened to me.

  15. DavidC says:

    Google is now ending CPA… it sort of worked for me, they should have released it to the public. Converting fraud was the problem I guess… it happened to me.

  16. How can my business make money online with pay per click affiliates? By setting up a pay per click program for your business and locating web hosts to post your advertisements, you will reach more customers than any traditional advertising method. More customers means more sales, which in turn means more revenue for you.

  17. i like using pay per click but you have to find the right one. I have used google and have never had a problem with them.

  18. Blog Tips says:

    thank you for sharing

  19. As far as I know a good number of CPA programs already eat the cost on refunds and if not right now you certainly don’t get any money back when an order gets refunded that came from your adwords spending so I really can’t see this becoming a huge issue, considering that your taking most of the risk out of advertising everywhere and paying for non-converting clicks..

  20. [...] Google might not refund its per-action fee. I’ve seen some references to this being called Click-Order-Return (COR) fraud, but we have too many TLAs (three-letter acronyms) as it is, so I prefer to call this [...]