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Google Will Introduce Cost Per Action (CPA) Ads?

June 23, 2006 by  

David Jackson of SeekingAlpha has written about an email from the Google’s AdSense team inviting him to participate in a new advertising program based on Cost Per Action (CPA) basis.

In CPA, you get paid whenever a site visitor clicks on the ad and performs a specified action, such as generating a lead or purchasing a product.

According to Google, these CPA ads will not compete with contextually targeted ads. Instead, they will show across a separate network, the Content Referral network. To place one of these ads on your site, you can set up a new ad unit that supports any of Google’s current ad unit sizes.

I am looking forward to join this program as it becomes available to the rest of us.

I’ve been actively involved in promoting CPA programs from ValueClick, Maxbounty, CJ.com and several others. I actually find it easier to make money from them than AdSense, that is, if you have the traffic and the right audience.

The conversion rates for CPA ads usually lower than that of CPC ads since CPAs demand more from the customer than just a simple click. Nevertheless, you could be making a lot more money from a single conversion than say, from 100 clicks.

For the test, Google allows more flexibility in saying things like “I recommend this product” or “Try JetBlue today” next to the CPA ad unit. However, they do not allow the use of “Click Here”.

The problem with this rule is that CPA ads work better only when a publisher is allowed to pre-sell them.

Pre-selling warms up your visitors, getting them in a ready-to-buy frame of mind before you send them to a merchant’s site.

I would say preselling is the most important skill in affiliate marketing as it can make or break your marketing effort easily.

In order to pre-sell, one should say more than just “I recommend this product” or “Try JetBlue today”. After all nobody will buy a $199 product when all you can say is “Try JetBlue today”

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Comment by acid911
2006-06-23 06:14:02

I, for one, am just a little bit wary of CPA ads. They could be a blessing in disguise for the average webmaster/blogger, but they still having a potential to make things difficult for them. It all depends on how high the payout is, and of course what kind of actions the advertisers demand (lead or product purchase, etc). For my money, it could well turn into an affiliate market sort of thing (and for some people that doesn’t bode well).

It’s always easier to send other people to a website than it is driving a lead or a purchase. Of course, more and more advertisers want to make sales instead of just driving traffic to their site, so they may as well be tempted to opt for the CPA program. We’ll see how things turn up – it could be interesting, but my gut feeling is we might be in for a cul-de-sac (or dead end if you will) – at least for publishers who depend on the CTR model!

By the way, great site you have here, mate. This is my first post, and sure one of many more to come. Cheers and have a great day!

 
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