If you Pay Per Click is bad, then CPA is a Nightmare

Yet another articleout today calling CPA the Savior of  google because Pay per click is bad.   I wish people who wrote these articles had some actual experience as an advertiser/publisher.

My biggest concern these days when doing CPA stuff is am I going to get screwed over by the middle man? I can tell you there are a LOT of affiliate networks that are skimming off the top.   Now even if you go direct to merchant what is the chance that the merchant isn’t going to screw you over?   Lets say they decide to report only  80% of the leads you actually generate?   Now in the CPA world this happens all the time,  you have to remember these are the exact same people that will do anything for search engine ranking and do any kind of spam as long as they don’t get caught. Advertisers have also created 2 billion dollar adware industry, whose sole job it is to hack your computer and display ads.   There are a lot more advertisers out to screw people over then there are people trying to game google adsense.

In short you would be shifting “fraud” from adsense publishers and random people clicking on ads to SEM/Affiliate marketers/SPAMMERS/Adware and Advertisers with very deep pockets who are already doing everything they can to game google. 

Google would just turn a mild problem into an absolute nightmare.    There would be absolutely no way of detecting CPA fraud.   Given that a high percentage of googles revenue is coming from small bands of affiliate marketers I could see this being HUGE.

The CPA Scheme relies on the advertiser telling google when someone bought something.   Now if google hosted the transaction/ordering page, and forced people to use Gbuy to buy well then its a totally different ball game as google knows every transaction that happens.

7 Responses to “If you Pay Per Click is bad, then CPA is a Nightmare”

  1. Joshwa Says:

    And that, more than any hope of direct revenue, is probably why google is rolling out google checkout. If they can increase the reliability of CPA, sure as hell it will be integrated with AdSense and AdWords.

  2. CPCcurmudgeon Says:

    An argument for CPA is that the locus of fraud exists primarily between the advertiser and the search engine or ad network. In CPC or CPM, the locus of fraud is much more widely dispersed. It’s much more difficult to stop the fraud because it can be made to look like normal traffic that doesn’t convert, and it can be launched by just about every type of device that can be placed on the Internet.

    The SEs and ad networks will have clickthrough data that they can use to determine an expected amount of money made by the merchants during some time period. If the merchants do not pay enough, they’ll be dropped from the program. For honest merchants, it’s not a problem, and in fact it’s an incentive to pay as expected. Being branded as a dishonest merchant would not only risk being dropped from the program, but it would risk lost business due to lost image. If anything, this could help weed out dishonest merchants.

    I acknowledge that there will be fraud; some merchants may be able to get away with paying a little less. There isn’t going to be a fraudless solution; the best thing to try to do is minimize risk. My personal opinion; advertisers should be charged fixed fees, which are determined either based on bidding or some statistical study of the user population on sites where ads are placed.

  3. Brian Wiegand Says:

    I agree completely with the trust issue (as you call CPA fraud) with merchants participating in the advertising. They clearly would have an incentive to not report transactions which would be a nightmare for the intermediary. This is why at http://www.jellyfish.com we have built a CPA based advertising auction that actually brings another VERY interested and important party into the mix – THE CUSTOMER. We give a customer a share of the CPA advertising. This erases the CPA fraud issue because There are 3 parties involved that all need to get their share of the transaction. If a merchant doesn’t report a transaction we would have a very angry customer that would let us know immediately This eliminates the CPA fraud issues altogether and actually drives some additional value to the consumer who arguably deserves more for their attention and participation with advertising.

  4. Scott Karp on the Convergence of Media and Technology Says:

    […] Markus from Plentyoffish.com has a similar concern: My biggest concern these days when doing CPA stuff is am I going to get screwed over by the middle man? I can tell you there are a LOT of affiliate networks that are skimming off the top. Now even if you go direct to merchant what is the chance that the merchant isn’t going to screw you over? Lets say they decide to report only 80% of the leads you actually generate? Now in the CPA world this happens all the time, you have to remember these are the exact same people that will do anything for search engine ranking and do any kind of spam as long as they don’t get caught. Advertisers have also created 2 billion dollar adware industry, whose sole job it is to hack your computer and display ads. There are a lot more advertisers out to screw people over then there are people trying to game google adsense. […]

  5. CPA Bloger » Blog Archive » Pay-Per-Click Ads Are “Indifferent Displays of Advertising” Says:

    […] The Paradigm Shift […]

  6. Darren Says:

    A bit late to the posting party, but wouldn’t this be solved by embedding tracking pixels?

  7. Rodney The Pay Per Click Guru Says:

    There are hundreds of Pay Per Click Search Engines you can buy traffic from. As this number increases, it becomes more difficult to determine which ones are worth your time using. Google AdWords – The biggest and best for volume, traffic quality and user interface. However the most expensive.

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