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Comment by turingcomplete | Hacker News Reader

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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Actually, it can work on the same principle as PPC, except the $/click takes time to work out (you have to send traffic to the site to determine how much revenue it gets you). Analagous to your example is Amazon biding $0.00001 per click - they would simply be outbid by sites willing to pay more for the keywords. The only difference is that with PPC there's a minimum - I think it's 5 cents, though it might have increased to 10 - but you can define an action as an extremely infrequent event. But that difference only comes into play when you've got no competition, and if you've got no competition for a keyword, it's extremely unlikely that it's going to be a lucrative one.

The key point is that Google figures out how much it makes by sending people to a site, and ranks the sites based on that metric. So just like Adwords, there's no getting around the fact that paying Google more (by bidding higher, or on more frequent events) will get you better placement, and therefore more traffic.

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.

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

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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