Google moves the Affiliate Industry Cheese!
Google (GOOG) has announces the soft release of their new CPA platform, through which they’ll be allowing selected advertisers and publishers to run Cost Per Action campaigns in addition to the standard Cost Per Click Adsense / Adwords model that now dominates the industry.
Some commentors have mused that this could kill off established Affiliate Networks like ValueClick’s CJ Network (VCLK).
I would counter that it’s a little early to be making such bold assertions. Sure, the cheese has been moved - but that’s the nature of our ever evolving industry. I think that this move will herald a new competitive landscape that will enable more advertisers to venture online and test the CPA / Affiliate Marketing Business Model.
If Google commits their full weight to this initiative we’ll see unprecedented growth and the performance marketing industry as a whole is going to benefit.
As outsourced affiliate managers we’re excited by the prospect of being able to add Google CPA to the mix, but we’ll do so carefully. One of the cornerstones of affiliate marketing is performance measurement and ROI measurement.
In order to ensure that you’re getting ROI, especially on lead campaigns - you need to know who you’re doing business with. As someone who’s borne the brunt of Adsense or Ad Network Fraud will know, unless you know who’s sending you the clicks, leads or sales - and unless you have recourse - you’re not going to be able to sustain your campaign.
I look forward to chatting with the ‘Googlers’ in more details.
All my best - Jon
June 26th, 2006 at 12:56 pm
Jon,
Do you see Google jumping into this particularly agressively in productive verticals? It would seem self defeating for them to walk away from concrete advertising revenues for CPA’s unless they were using the CPA route to fill verticals that were tough to sell, or making them available only to tier 1 merchants on exclusive offer deals .
June 28th, 2006 at 5:13 am
Good question!
it could be that they’re only going to be doing this in tough verticals - or it could be a long range move to pre-empt the fallout from the bad press they’re picking up regarding recent assertions on TV that up to 70% of their revenue could be as a result of fraudulent clicks.
If it’s the case that a significant portion of thier revenue is indeed generated from fraudulent revenue then it makes sense for Google to move to CPA and insulate itself from further class action suits like the last one it just settled.