Google has launched a beta Cost-Per-Action program where the advertiser can choose to pay only when the user has performed an “action” defined by the advertiser. These ads will run only on the AdSense publishers who opt-in to run these ads, not on the Google Search results page.

Is it fair for Google to expect the publishers in the AdSense network to shoulder all the risk of the users converting for the advertisers when they themselves are not willing to shoulder this risk on their own search results page?

Google’s initial CPC pricing model does a more equitable distribution of the work required to get conversions:

• Publishers are responsible for quality content, driving quality traffic to their site and engaging the online audience with their content.
• Google’s responsible for doing a good job of matching the content of the site to relevant ads.
• The Advertiser is responsible for creating good offers and simple, easy to use landing pages and acquisition processes.

With the CPA pricing model, the publisher is expected to take on the entire risk without having control of the entire acquisition process (they don’t have control of the advertiser’s landing page or conversion process). Publishers can choose which offers to place on their site based on their knowledge of what their users like — so this program will not rely on Google’s technology to do a good job of matching relevant ads to the site’s content.

The CPA pricing model is nothing new – the Affiliate networks like Commission Junction and Linkshare have been operating on this model for years. However, as Pat McCarthy so aptly writes in his post, Jumping to Conclusions on Google’s PPA, “these [affiliate] networks provide a lot of value because they help advertisers create the right kinds of creatives and really optimize CPA. How much advice is Google going to really give on setting everything up? How much human touch will they provide to this process? With Google’s program, if the advertiser’s landing page sucks will Google consult to help them improve it?”.

Isn’t it about time the Networks start shouldering the responsibility of making advertising work for both the advertisers as well as the publishers?

If your answer to the above question is a resounding “Yes!”, read Jay Sear’s blog: Hey Web Publishers, Put the Risk on Us: Name Your (CPM) Price.

Tags: AdSense, AdWords, PPA, CPA, publishers

This entry was posted on Friday, March 23rd, 2007 at 8:00 am. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.