Perhaps you’ve heard of Google’s mantra, “do no evil”. I was concerned that their going-public would shift the focus of their company towards profiteering, if not evil. As it turns out, they seem to have been too clumsy (and blessed by Wall Street) to be digging for profits.
Staying squarely in the ‘no evil’ category, the big story this week is that they are testing AdSense payment based on “Cost per action”, or CPA. A click-thru would not be enough, the visitor would have to ‘convert’, or achieve a goal on the website. Advertisers using this model would only pay for traffic that matters, and risk of click-fraud (i.e. evil) would go away. For the sites hosting the ad, a potentially higher pay-off should offset their PPC income.
This sounds great, but there are questions that seem hard to resolve, especially for advertisers like me (which is maybe why Google is only ‘testing’ CPA).
The obvious technicality is that for a lot of smaller & B2B businesses, the most common ‘action’ coming from their website is a phone call. And these are the people who also are paying much more per-click in their current PPC campaigns. Which means they have a lot more at risk for click-fraud yet cannot rely on CPA to help due to the untraceable phone call.
The other problem is simply numbers. AdSense needs thousands of impressions just to create PPC activity worth mentioning. And of those clicks, only another 1-2% are going to convert. And because that conversion for small or B2B businesses is not a sale, we aren’t going to want to pay a high bounty for ‘just a lead’ (unless quality can be determined).
Russ Perkins, at InfoCommerce Group, points out a deeper issue in this week’s newsletter, titled Does CPA Add Up To Trouble? that this would once-again upset the apple cart regarding the job of advertisers and the publishers carrying the AdSense ads:
“If CPA takes off with advertisers, and I think it will, we have to watch it closely. If it remains limited to publishers getting paid (hopefully a lot) for generating hard sales leads, that’s one thing, and a number of us could do quite well in this environment. If it morphs (as I predict it will) to advertisers demanding to pay only when they make a sale, we as an industry have to draw the line. The purpose of advertising is to stimulate interest, not guarantee profits.”
While the CPA program may flourish with e-commerce businesses, I don’t see it gaining a foothold in the B2B sphere.
In addition, I will go one further: As B2B advertisers look closer at their spending and conversion rates with AdSense (as compared to AdWords), they will start to pull out of AdSense.
The next smart place to try is Google’s Site Targeting, which is paid on a CPM basis, but allows you to choose what sites to run your ad. That kind of human selection should provide a greater chance of clicks and conversions.
“Which means they have a lot more at risk for click-fraud yet cannot rely on CPA to help due to the untraceable phone call.” Unless of course Google VoIP comes to be and they can track calls and make the process easy.“… I don’t see it gaining a foothold in the B2B sphere.”I can see a lot of B2B companies wanting leads over clicks, which have conversion percents like any other sales channel. The numbers will be lower, but the overall quality and interest will be much higher.
“Which means they have a lot more at risk for click-fraud yet cannot rely on CPA to help due to the untraceable phone call.” Unless of course Google VoIP comes to be and they can track calls and make the process easy.”… I don’t see it gaining a foothold in the B2B sphere.”I can see a lot of B2B companies wanting leads over clicks, which have conversion percents like any other sales channel. The numbers will be lower, but the overall quality and interest will be much higher.
Check out this 8/05 Internet Retailer article “ROI beyond the web: tracking keyword campaigns out to the call center”. At the end it talks about a B2B merchant’s initial money saving success with the technology.http://www.internetretailer.com/internet/marketing-conference/62232-roi-beyond-web-tracking-keyword-campaigns-out-call-center.html“Carpenter says that because users who come to the site through a paid search campaign and then contact the call center do so within the context of a unique toll free number, ClickPath can integrate that information back into its web systems and match up those two interactions.” Google’s technology has got to be even better than ClickPath’s.Using toll free numbers for Google’s CPA ads will greatly help stop major click fraud as traceability to the culprit would be easy. I don’t know exactly how Google’s beta CPA works, but it could include phone leads, and they could charge different rates for different kinds of actions.
Check out this 8/05 Internet Retailer article “ROI beyond the web: tracking keyword campaigns out to the call center”. At the end it talks about a B2B merchant’s initial money saving success with the technology.http://www.internetretailer.com/internet/marketing-conference/62232-roi-beyond-web-tracking-keyword-campaigns-out-call-center.html“Carpenter says that because users who come to the site through a paid search campaign and then contact the call center do so within the context of a unique toll free number, ClickPath can integrate that information back into its web systems and match up those two interactions.” Google’s technology has got to be even better than ClickPath’s.Using toll free numbers for Google’s CPA ads will greatly help stop major click fraud as traceability to the culprit would be easy. I don’t know exactly how Google’s beta CPA works, but it could include phone leads, and they could charge different rates for different kinds of actions.