|
I recently made a post about my views on PPA and why it's a HUGE danger to publishers. Let me reiterate some of my key points:
1 - The conversions on PPA will initially be much higher than PPC (First-tier affiliate programs, like AdSense, claim an average conversion of anywhere from 8-10%.)
2 - Therefore, the bids on PPA advertising models will have to be much higher than PPC, and while this lead to higher conversions.
3 - With much higher bids than PPC, the conversions for PPA will fall. Why?
Say advertising in Google gets 1 sale out of 100 clicks - in other words, advertisers get 10% conversion with Google. With a CPA model, publishers won't be paid for the 100 clicks, but only for the 10. Therefore, for publishers, the bids should be 10 x as high as they are now.
4 - Will they be? Will advertisers paying 15$ for a click now with PPC simply switch it up and pay 150$ in PPA? Probably not, despite the initial conversion data. So most publishers won't go for this model (if Google gives them a choice, which they surely will, or lets them have both PPC and PPA, which they surely won't) and the ones that do will probably try and cheat it, leading to lower conversions and tons of clickfraud.
5 - Clickfraud is estimated anywhere from 15%-40% (my own personal estimates are quite higher). Imagine the clickfraud on an ad valued at $150! Conversion rate and bid fluctuations over any advertising model (PPA or PPC) leaves the door is wide open for fraud.
6 - In PPC, a click is a click (unless it's invalid, and trust me, its the advertisers who get the last word on whats invalid, not Google). In PPA, who gets the last word on what an "action" is?
7 - I believe, though I'm not sure, that users can define what an "action" is - who's to say they won't define a click as an action, thus making all the PR Google is telling their advertisers about the benefits of PPA fluff?
8 - And what if the advertisers get to decide what an "action" is, thus deciding which clicks they'll pay for? Alarm bells should be ringing for publishers everywhere.
9 - Higher bids do NOT mean less clickfraud. In fact, I see more opportunities for fraud (both by publishers and advertisers) with PPA. I think the PPC model works best - it's transparent, earns solid results and revenues, and is in fact easier to monitor against fraud. It also compliements what advertising is supposed to be - a message from the firm to the consumer.
Advertising is not just about earning a sale for everytime someone sees your ad. Advertising creates brand recognition, exposure, and more often than not lead to indirect sales. Paying for every click to their website costs advertisers more, but its part of the WHOLE buying process. PPA is like saying to the TV company "ok we're not going to pay you for airing our commericial, we'll just pay you everytime somebody buys our product and mentions your TV station".
|
