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Google Examines Cost-Per-Action Advertising
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Mission Viejo, California - (Website Hosting Directory) - June 26, 2006 - Google has started to examine Cost-Per-Action (CPA) advertising, which, enthusiasts believe, may validate the CPA Industry Cost-Per-Action model and lessen click fraud.
Spectrum Direct is a life insurance sales and marketing organization, licensed in all 50 states, whose products are entirely internet-based and designed to enable the purchase and management of policies online.
Affiliate programs rely on mutual profits for both the affiliate-publisher and the merchant-advertiser who are partners in the CPA process. The advertiser pays the publisher to run their ad only when an action (the 'A' in CPA) happens. David Jackson, who writes an investment blog called SeekingAlpha, posted a copy of an email he received from Google about their cost-per-action test.
Prior to this new testing, Google's ads have only been run on a Pay-Per-Click model, which has recently been cited for allowing click fraud, where the clicks the advertiser pays for often don't amount to any traceable action. Click fraud is difficult to track and impossible to prevent. The beauty of a Cost-Per-Action model is that both the advertiser and the merchant who owns the offer can see the results of an advertisement and determine its profitability.
Christopher Snyder, CEO of Spectrum Direct commented, ''We've been utilizing the CPA model since 1999. It’s worked for us - we are the largest seller of E-Commerce Life Insurance, and have been utilizing CPA for over half of our transactions, so it’s great to see Google come around to what we’ve been proving for years!''
Anytime Google tries something new it is newsworthy, but many observers attribute Google's testing the CPA model as a response to click fraud. In theory cost-per-action advertising is not at risk of click fraud. A Google spokesman confirmed via e-mail that the company is conducting the test. The CPA model appeals to a different type of advertiser than the cost-per-click model, offering both could increase Google's profitability at a time when their shares need it - they've fallen 3.1% so far this year.
The CPA market has long been populated by affiliate networks who match up merchant-advertisers with affiliate-publishers, often times with a network acting as an intermediary. The CPA model really appeals to merchants who want every advertising dime to count. Mr. Snyder continued, ''If Google accepts Cost-Per-Action advertising, can MSN and Yahoo be far behind?''
For additional information on Spectrum Direct or the American Life Direct Affiliate program, please visit: www.americanlifedirect.com.
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