Google announced recently that they will be offering Pay Per Action (PPA) advertising in addition to their well established Pay Per Click (PPC) program.Currently in beta, and only available to US based subscribers, will this new program make huge waves in the affiliate advertising community?

What Is Pay Per Action? 

The google adwords (for advertisers) and adsense (for publishers) programs currently charge/pay each time a advertisement is clicked on by a user and this is open to abuse by fraudster publishers clicking on their own adverts or using automated clickbots to gain revenue. Google is very aware of this and some industry insiders quote figures of 10 to 30% of all clicks could be considered fraudulent.This is alot of profit for the fraudsters and a huge cost for advertisers even if only a small percentage of this is undetected. Dispite the click fraud problem the advertising model works well and continues to attract both advertisers and publishers.

Why Launch PPA? 

So why is google launching a new PPA product if the PPC click is working so well? Will it eventully move away from the PPC model that redefined online advertising and offer just PPA advertising? Most likely it will wait and see how the markets change before making any decisions. Are advertisers concerned enough about click fraud to jump ship altogether or will they see PPA as an addition rather than a replacement? Most likely both will remain side by side although I expect many advertisers to move away from PPC to PPA.

For some advertisers the PPA action model will definately be a better option. Online retailers will benefit as they can run a campaign that they will only pay fees whenever they make a sale of a product or service so they are guaranteed to make profit or not pay any advertising fees if they get no conversions. It eliminates the risk for retailers and will probably attract new customers that have previously stayed away from PPC which can be costly and ineffective if the conversions are low. Retailers that sell low value products and services though may be forced to remain with PPC as PPA might cost more than their profit margins as compitition for keywords pushes prices up.

For google however there isnt really much risk launching PPA. It will most likely attract some new customers and if customers leave PPC to use PPA then they have kept those customers happy by offering them another option and maybe retaining customers they would have lost to other affiliate schemes. Its one more string to googles bow. 

How will this effect adsense publishers and will it mean reduced revenue?

The PPA adverts will be shown ONLY on the content network and not the search network so this will amplify any effect in this area. The PPA program isnt exactly a new model and is basically the same as most affiliate programs that only pay for purchases or signups. Unlike normal adsense ads that analyse the content of a web site to determine relevent ads to show on the site adwords PPA allows the publisher to choose which ads to show on their site. For publishers that dont wish to trawl through directories of adverts there will be an option to let google choose the highest paying relevent ads from various topic areas. Revenue earned will most likely be comparable to PPC revenues for sites though but earned through a low volume of sales as compared to a higher volume of clicks.

It impossible top predict what will happen but it certainly will be interesting to see how things pan out. Google is a pretty savvy operator in this field so will probably have its plans well founded and make their latest product a big player in this area very quickly. They will need to ensure that the publishers can earn as much or more than the PPC network using PPA though or no publishers will sign up for the program. If there are no publishers , and remember this relies purely on publishers as it is on the content network only, then there will be no advertisers.Google will surely realise this and I expect when the program comes out of beta then there will be plenty of incentives for publishers to sign up.

For publishers that dont put the work in with the new program and choose adverts that aren’t very relevent for their readers then they will most likely not have much success with PPA.Those that know their markets or have very niche focused sites could make good profits. Expect to see lots of new sites starting up to focus purely on google PPA topic areas also.

More info on googles PPA program can be found here : Google Pay Per Action

What do you think PPA means for the current PPC publishers? Please comment and let us know.