Google Enters Affiliate Marketing
Google has confirmed that it will soon launch a Pay-per-Action (CPA) variation of its Adsense. Adding CPA capability to its existing Cost-Per-Click (CPC) advertising products is an easy move. The CPA option will detract from its current Adsense revenues, but the total revenue from advertisers will likely increase.
Details of Google's announcement were reported by John Battelle, who reports on Google.
As with all of Google's developments, it is good news for some and bad news for others. The good news is for advertisers. The "Cost per Action" mode will be much welcome by advertisers as it will improve the efficiency and the return on investment of their online ad spend. Also, the Cost-per-Action practically eliminates click fraud, as fictitious clicks will not longer be a cost to the advertisers.
Cost-per-Action means more pressure for publishers, advertising netwoks. The current CPA advertising providers are the affiliate marketing networks which are:
- tradedoubler.co.uk - Tradedoubler Affiliate Network
- affiliatefuture.co.uk - Affiliate Future Affiliate Network
- dgm-uk.com - DGM Affiliate Network
- affiliatewindow.com - Affiliate Window Network
- buy.at - Buy.at affiliate Network
- paidonresults.com - Paid on Results Affiliate Network
- webgains.com - Web Gains Affiliate Network
- Value Click's Commission Junction
With Google's entry into the game, both advertisers and publishers acquire the option to use Google's CPA-Adsense network. Google becomes a one-stop shop for all modes of advertising, ads based on page views (CPM), ads based clicks (CPC), and ads based on conversions, purchases or acquisitions (CPA).
Google will translate the performance of all these ads into “effective CPMs” in its campaign management panel, allowing publishers to compare and optimize for whichever type of ad produces maximum revenue. WIth Google's dominant client and distributor base, it is bad news for the above affiliate networks.
Publishers will no doubt come under pressure with the CPA model. The pressure of conversion to a sale will be now be also on the publishers. Un-qualified traffic, like those generated by DNP (Domain Name Parking) publishers, will no longer generate good revenue.
The recent move to make Google Base Froogle's Data Feed may be a precursor for the CPA-Adsense to use Google Base as its product feed. The importance of generating a product feed for advertisers may be about to increase