We Want Results, Dammit!
The cost per click payout method of Google AdSense has been controversial since the time it was invented. There has always been the possibility of manipulation, which translated to advertisers paying more for worthless ads. Click Fraud, as they call it. Advertisers just end up wasting their money on fools who click on their own ads for the sole purpose of generating a payout.
But of course, Google is smarter than the rest of us, right? They banned such curiosity clicks from their terms of service, and created a method to detect whether an account’s click ratio is within acceptable limits. But then the unscrupulous AdSense publishers worked around this by hiring click monkeys to click on ads randomly, and still maintaining the click to page-view ratio. This was mostly from overseas (where labor is cheap). So Google invented the smart pricing. Clicks cost more if they originated from higher-income countries, or countries where the advertiser’s product is actually sold.
But you still can’t get stop wasting money. That’s because even if those clicks are from legitimate users—even your actual market—all they ever do is visit your site. And what happens next is up to them. Even if the conversion rate was zero percent (meaning no one actually buys your product or service), you still end up paying for the click.
Google is exploring a better system: cost per action. Similar to how affiliate marketing schemes pay out publishers. You only pay when people actually do something, like buy a product or sign up for a newsletter, or give you their contact info.
Even the New York Times gave it some attention lately.
Under the “cost per action” system, advertisers decide what they are willing to pay for a specific action, like a purchase or a software download. Armed with that information, Web site publishers then choose whether to run a specific ad or group of ads on their sites.
Many advertisers find cost-per-action appealing, as it greatly reduces their risk, since they are not charged for ads that are ineffective. The model has long been used online by “affiliate marketing” companies like ValueClick, which have created networks of hundreds or thousands of Web sites that display small ads for e-commerce sites. The publishers are paid when they refer a user who makes a purchase.
Cost per action ads are appealing both to advertisers and publishers. Advertisers can finally get 100% (or close) conversion rate, and they won’t have to pay for wasted clicks. And if the price is right, publishers, meanwhile, would be happy to earn more from affiliate sales rather than live by with the few cents that a click can bring you.
Of course, this is still wait-and-see. The advantage of AdSense is that you don’t really have to push your advertiser’s products (in fact, it’s illegal to encourage users to click). But with the usual affiliate systems, you have incentives to push the products yourself since you don’t earn until someone actually makes a purchase. I wonder if Google’s cost per action system will allow for this.
We hope this new results-oriented Google advertising scheme works.
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Smart SEO Blog » Blog Archive » Multi-lingual Sites And SEO In Detail said this on March 15, 2008 4:01 am