Google's CPA model allows publishers to display adverts and be paid on a completed action basis. Previously, Google has limited this form of advertising to a 'per click' (Adsense), or occasionally a 'per impression', basis. It allows the advertiser to set a fixed amount that they are willing to pay per action - or your cost per acquisition (CPA). Importantly, advertisers do not need to be signed up to the content network to operate CPA ads.
Some immediate limitations have been identified by affiliates and publishers, notably the stipulation that publishers can not use PPC to promote pages where Google CPA ads are displayed - but the extent to which this is enforced by Google remains to be seen.
The move has been labelled by some as a direct threat to affiliate networks. However, Google will not provide certain key attributes that are provided by affiliate networks. These are:
- Exact commission amounts - similar to Adsense, publishers will be paid within a fixed range.
- Tailored adverts - CPA ads will keep the Adsense format.
- Choice of advertiser - Google will determine who is shown on publisher sites, unlike an affiliate network where affiliates can promote specific merchants.
- Support - a USP of most affiliate networks is that they provide advice to affiliates and publishers to help achieve conversions for the merchant.
If Google gets close to this model of support and relationship building, they lose completely the self-service, hands-off approach that has allowed them to access the mass-market.
However, this is also an argument that may see publishers preferring to remain pay per click. Why would a site with a decent source of income via Adsense, risk the switch to the CPA ads only for the merchant sites to convert poorly?
For advertisers, Google's new CPA model provides another measurable tool to test. There will be almost unlimited potential for advertisers to format offers mixed with variable CPA base rates. It should not be confused with a pure affiliate program, however. These are still just 'ads'. They are not banners, coupons, vouchers, cashback incentives, email templates or any other resource that allows affiliates to integrate a merchant into their site.
If Google can now be called an 'Affiliate Network', then it should have been given this name many moons ago when it launched Adsense, a model which many view as a pay per click affiliate program.
Google's CPA model may provide an immediate threat for smaller affiliate networks in the US, but for larger organisations, like Commission Junction and LinkShare, their offering is too great for affiliates and publishers to turn their back on. However, Google may take a huge hit to their profits to achieve market share, at which point networks may have a real battle for publishers and affiliates on their hands.
