23 июн. 2006 г.

Google officially begins testing new cost-per-action advertising solution

bigmouthmedia wrote:

The innovations in advertising delivery are coming thick and fast from the California based uber-search provider. Following on from announcements last week of more graphically, and even video based, display adverts Google have officially announced that they have started testing on a new AdSense service where the advertisers pay only when their ad leads to an actual purchase; or at the very least, definite interest in making a purchase.

Due to growing criticisms, and a rather hefty lawsuit, the new “cost-per-action” (CPA) ads are being looked into principally as a way to combat click fraud being perpetrated through the existing cost-per-click (CPC) method. This is where employees of competitor companies click on a rivals’ adverts in an effort to deplete their marketing budgets. Other common methods of committing click fraud is to use low paid foreign workers, or to utilize online robots (bots) which are programmed to click on the advertisers' links which are displayed on sites or are listed in search queries. The new ads will remove the benefits that currently can be gained by rivals, as clicking the adverts alone will have no cost effect on the advertiser.

As part of the official statement, Google announced, "We're always looking for new ways to provide effective and useful features to advertisers, publishers and users," they also said added that, "As part of these efforts we are currently testing a cost-per-action pricing model to give advertisers more flexibility and provide publishers another way to earn revenue through AdSense. We're pleased with how the test is progressing and will continue to gather feedback from advertisers and publishers."

While the CPA adverts are essentially nothing more than a traditional affiliate program scheme, the introduction of such a programme within the search market could see big advantages for some however they will not be the perfect solution for everyone, and they are not without their own problems. Perhaps the main difficulty for some advertisers is that CPA schemes are of no value to advertisers who do not have any type of immediate service or product which can be provided as the target "action". The determination of what a successful completion of an action may also be difficult to define for many advertisers currently using CPC marketing. Another factor to consider is that the cost per click rate is liable to be much lower for the advertiser than the cost resulting from a completed action. This means that while the conversion rate may be higher for CPA over CPC, the return on investment may prove to be lower.

Whether CPA is a better solution for all advertisers is dubious, however it will be a welcome alternative for many businesses interested in converting genuine fast sales. Yahoo! are expected to also be producing a similar scheme for release in the near future.