23 Musings

Google is trialing cost-per-action adverts on publishers sites in the U.S. I've been expecting this for some time as a natural progression for Adwords/Adsense to move to a similar model to affiliates. This will help advertisers avoid click fraud and see more of a return on investment.

More details on the trial are on the Googleblog.

So we're in the web2.0 age and the web's advancing quicker than ever, new interfaces, social aspects, interaction of users with data etc etc. One thing that hasn't changed is the model us advertisers pay for things like price comparison websites, pay-per-click. Google has used pay-per-click for it's sponsored listings Adwords product sucessfully and I wouldn't imagine that will change, but for your average price comparison website which is supposed to deliver much more qualified users isn't it about time they moved to a cost-per-acquisition model?

Being in travel we use price comparison sites a lot and derive a lot of traffic from them although not a huge amount of sales. Moving to a CPA model will complement the work these sites are doing to integrate content into their offerings, they're trying to increase the quality of the visitors they send through to us and so should increase the conversion rates. Running on a CPA model could then prove to be in their interests as they may drive less clicks ultimately but with greater conversion. Staying on a PPC model would mean they will lose revenue rather than gain from all their hard work to optimise the listings.

With cookie tracking so easy to implement and fairly accurate, keeping a track of the sales isn't a problem and most people do this anyway. Moving to CPA will also remove any risks of click fraud as there will be nothing to be gained anymore.

As I said, I'm not sure Google would ever go down this route for Adwords, search is much more about driving high volumes of traffic and the visits are never going to be as qualified as those from a price comparison site. PPC seems a little old fashioned as a business model for a website that should be driving sales rather than purely traffic!