
Google Now Offering Pay-Per-Action Ads - python_kiss
http://services.google.com/payperaction/
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zaidf
This is going to be a tough nut to crack.

What I can see working out is google setting some kind of conversion:cost
metric. ie. if you average 1 action per 1,000 displays pay $10/action; if you
average 1 action per 100,000 displays pay $500. It will be a challenge
determining the initial conversion ratio. But by common logic - it might take
10,000 clicks for someone to buy a Merc online and Merc won't mind paying Goog
$500 for it. Problem arises when a $40 product takes 2000 displays to get a
sale.

Lots of setting standards, way I see it.

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reitzensteinm
Well Google can always put unproven sites on the backburner, sending them very
little traffic. 10,000 clicks to sell a Merc is a good point, though, it would
take forever. Maybe they could do a backburner system but you can pay to jump
the queue? Almost defeats the purpose.

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reitzensteinm
What I don't understand is why they aren't letting these sit side by side
Adsense and Google.com ads. It wouldn't be hard to figure out a profit per
display metric, although it would need one or two order of magnitudes more
displays to calculate. Maybe it will once it's out of beta?

It surprises me that they didn't hook this up to Checkout first
(<http://news.ycombinator.com/comments?id=2087).> It would have been much
simpler for webmasters that already use Checkout to get started, and for
Goolge to track.

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turingcomplete
So would it be possible for say, Amazon.com to define their action as the
purchase of some esoteric food product? They'd get the benefit of all the page
views, but would only have to pay the ransom on the 0.01% of users who buy
Amazon milk. It seems hard to address the issue without a lot of human review,
for each advertiser.

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python_kiss
The human review would certainly cause scalability problems. Amazon.com
already does PPA with their book referal program. For instance, they pay their
ad publishers only when their users purchase a particular book through their
site.

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staunch
Amazon's is just an affiliate program, no? That's kind of the opposite of what
Google is doing.

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joshwa
How is this different from affliate? It's all CPA (or PPA, if that's what
they've decided to call it). I guess in this case you're not paying based on
the actual value of the sale, you're paying based on what you bid as the
actual value of the sale...

I see this as Google getting into the affilate marketplace, and integrating
the adwords buying (which many many many affiliate marketers use) and
affiliate payout into one financial transaction.

Hmmn, thinking about this more, it's actually cutting out the middlemen in a
vast number of affliate transactions-- those that are entirely reliant on
adwords buys instead of eyeballs coming in through a particular publisher. Now
you can buy affiliate clicks on Google's entire network, instead of cutting
individual deals with lots of sites and dealing with the administrative
overhead of managing affiliates.

Smart.

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chandrab
CPC (Cost per Click), CTC (Click To Call), CPL (Cost per lead) and now
PPA...what's next? I wonder if this is in response to the clickfraud lawsuits.

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python_kiss
Google recently revealed that their click fraud is less than 0.02 per cent so
it is barely a problem anymore. This means that for every ten thousand CPC,
less than two are possible click frauds. Moreover, Google has algorithms that
automatically compensate adwords users based on the percentage click fraud.

Ads pay for Google's multibillion dollar business. They are introducing Pay-
Per-Action in order to diversify their income channels, not because Adwords is
failing.

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reitzensteinm
It wouldn't be a problem if that 0.02% was evenly distributed across all
advertisers, but I really doubt that is the case and it's the edge cases that
make the news, cause lawsuits and damage Google's reputation.

An example I'm personally familiar with, at www.iamfacingforeclosure.com a few
visitors banded together and started clicking on the ads over and over again.
Sure enough, the guys Adsense was canned, and that couldn't have happened with
PPA.

