Google Launches its CPA Network !

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Google Launches its CPA Network !

By Arnab March 23, 2007 filed in Miscellaneous, Internet Marketing, SEO, PPC, Affiliate Mktg, Newsletter, Adsense

This is BIG NEWS ! It affects all of us involved in Internet Marketing. Let me explain how, but before I do that, you might want to go through the technicalities explained by Google here: http://services.google.com/payperaction/faq.html - And before we get carried away, let me remind you that this is in BETA right now, has just been launched, and is open only for the US at the moment. But, it should follow soon to the rest of the world, and should definitely mean we all understand how this changes our business and hence adapt to this change. Remember, in each change, there is an opportunity as well !

What has happened ?

Google has launched its own CPA Network. CPA, or Cost Per Action, is a model where Advertisers pay only when a certain predefined action takes place (like newsletter registration, form submission, sale etc.) rather than having to pay per click (as in the PPC model). This means advertisers can now create Ad Campaigns and define parameters where they would pay on conversion(Action) rather than on each click.

Where would the Ads show up ?

The Ads would show up in the Google Content Network. This means that the ads would NOT show up on Search Engine results as Sponsored Links, but rather within the Publisher Network of Google, which means all the publishers who display Adsense Ads, now have the option of choosing to display CPA Ads instead. So they might not get paid a few cents per click, but might get paid a lot more if the click eventually leads to a conversion (Lead or Sale).

Who Loses ?

Tough to predict, but one group which would definitely take a hit would be the Affiliate Networks. All these years Publishers have been using Affiliate Banners to monetize their traffic (apart from Adsense). Which meant commissions for the Affiliate Networks every time these banners led to an Action (Lead or a Sale). If all these are now available at one place (Google), many publishers would be tempted to use only Google in future for getting banners/forms etc. on their pages instead of working with multiple Affilate Networks sending individual cheques which have to be monitored and consolidated. Imagine the convenience of working with a single company (Google) who will find all the advertisers, and send you (the publisher) a single consolidated cheque at the end of the month. Bad News, like I said, for Affiliate Networks like AffiliateCurry.com

Who Gains ?

Again, tough to predict. But one clear winner seems to be the publisher. Publishers who handle multiple websites across various domains have over the last couple of years tried to monetize their traffic through a combination of Virtual Real Estate spent on Adsense and Affiliate Banners (or Affiliate Text Links). Adsense has been easy to manage primarily because of simplicity of managing the code (same code replicated in all pages). Affiliate Programs have to be managed with their unique links - Make a mistake on that, and lose all your commissions

Plus there is the ENORMOUS pain of having to search for a relevant affiliate program searching across multiple networks. Since Google’s CPA Model is contextual, the system will figure out what the content of your page is, and place corresponding ads only. And my personal favourite - No more having to remove banners once the Affiliate Program expires ! Google will just stop showing that Ad on your pages. And finally, designed the way it is, Google’s system will automatically show the ads that convert best most of the time, which means the best possible earning potential for your website.

Of course, not all is in Black & White at this stage. We will need to see whether we will be able to bid on PPC to drive traffic to a website which has the CPA Ads (If you do this for websites with Adsense displayed, your minimum activating bid is usually pretty high). We will also need to see how things work out in the situation where the Advertiser chooses the websites his ads should show up for. Finally, we will need to see how many advertisers move to Google’s CPA Network and how fast they make this movement.

Lots to experiment, Lots to learn and lots to keep our eyes open about. I am sure I have missed something about this new happening in our life. Please comment on this page and fill it in for me (or ask me if you have any questions) !