Google CPA: Cash Cow or Free-For-All?
Google has been testing out a new advertising program. The program, Google CPA (CPA stands for Cost Per Action), is similar to the current CPC (Cost Per Click) options available with Google AdWords.
The difference is that, instead of advertisers paying for each click their ad receives, they would only pay for a click through to their website if the click resulted in the site visitor taking a specific action on the site, such as buying a product or completing a form.
The most obvious flaw with this concept is that it removes the incentive for advertisers to work on improving the conversion rates of their websites. If they can get all the traffic they want and only have to pay for actual sales or subscriptions, there is no need for continually tweaking their website layout, advertising copy, and other factors that have a direct effect on conversion rates.
It is unclear how Google CPA will affect domainers who earn money from parked domains. There are several factors here that we must consider.
- If (but more likely, when) Google launches Google CPA, many of Google's current AdWords advertisers will jump at the opportunity to get free traffic without having to watch conversion rates. Such a free-for-all scenario will be a nightmare for domainers and lower all our incomes dramatically.
- On the other hand, if Google is going to require minimum conversion rates from CPA advertisers, then it's really just the same as CPC. If you pay $5 per signup and Google tells you that you must generate at least one signup in every 100 clicks to continue advertising with them, then you might as well pay $0.05 per click. Statistically, most advertisers that are allowed to remain active would generate one signup per less than 100 clicks. The outcome: Google will actually earn more money from those of its advertisers who love the CPA option as a gimmick but do not realize that they would actually spend less if they simply paid per click. In this scenario, income for domainers with quality domains could actually increase.
- As for those who are saying that Google CPA will eliminate click fraud: it won't. On the contrary, it will make it much easier. Instead of having to click on thousands of ads through hundreds of proxies and hijacked computers around the world, professional click fraudsters will just need to click on a handful of ads and complete the corresponding actions (submit a form etc.) to generate a much larger amount of financial damage. More click fraud means less advertiser confidence, which could lower overall earnings both for Google and domainers.
With the buzz of Google’s latest round of Google CPA testing, people are definitely talking about the program on the Net. Readers of Kevin Sloan's The Key and Frank Schilling's Seven Mile blogs have been voicing their opinions candidly on the issue and there’s some definite banter going on DomainState. I haven’t seen anyone commenting on there yet who is actually participating in the test program, so if you’re already a part of the new Google CPA test service (or even if you’re not), write in here and let us know what you think of it all.
[...] it compatible with Google CPA? That remains to be seen. In theory, Google Arbitrage should be compatible with Google CPA because [...]
"If you pay $5 per signup and Google tells you that you must generate at least one signup in every 100 clicks to continue advertising with them, then you might as well pay $0.05 per click." Then this would remain the same story which is going on right now. I would be happy to continue with the current ads. But lets see what other things come by as they launch this one.
[...] Google CPA: Cash Cow or Free-For-All? » Daily Domainer Google CPA: Cash Cow or Free-For-All? … Google has been testing out a new advertising program … Google will actually earn more money from those of its advertisers … http://www.dailydomainer.com/2007120-google-cpa-windfall-or-anathema.html [...]
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I would prefer to pay the 0.05 per click.
Instead of having quality and informing websites, we would just have sites offering the cheapest products.
If the web is about quality converstion rather than quality content, then will normal rankings be affected this way.
Google has worked because even the paid adverts have related to the quality of the search terms.
I think creating a AD layout which generates clicks itself is a great success for the advitiser.
The product sign off has many other factors ,as to why the customer dosent go for a sign off.
Hence you(Google)team members should have your objectives clear or rather would have had your objectives clear before you launched the Cashcow programe.It was obviouse that you would have had fraud clikkers just to earn .
So i suggest let the programme not undrgo any change,cause your advitisers still get a milage of publicity because the web site was so attractive,,live aside the product.
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Having a minimum sale per quantity of actions or clicks, I do not belive will work as every product has a different ratio. In fact the economy, the time of year, is the world cup on and so many other factors determin, if a customer is buying or looking.
I for one may click or search things many times before I make a purchase.
So good idea, but the format of CTR is not right in my opinion.
Mark
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