Digesting Google's New PPA Advertising Product | Hacker News Reader

Digesting Google's New PPA Advertising Product

techcrunch.com

9 pointspython_kiss7 comments

Yeah, this is nice. The existing aff marketing networks are filled with all sorts of shysters. Shaving sales and unjustified termination of accounts before payment is sent is very very very common. This will put alot more honesty in the affiliate marketing area, which is a cesspool now.

PPA is certainly a great relief for advertisers. An interesting question, though, is whether such an offering is actually beneficial to the publishers? Domain-parking sites, in particular, might fail to generate profits through PPA and therefore stick with CPC instead. This advertising model might fail to scale if it is not mutually beneficial for both, advertisers and the publishers.

I think you'll see minimal impact on the landscape for publishers-- if they used CPA/aff before, they'll continue to use CPA-- Google is just another CPA source to them. Same with CPC.

The only shift I can imagine happening is that some CPC publishers will shift to CPA, as the overhead associated with evaluating the various affiliate brokers and opening accounts, etc, just got eliminated, as the publishers already have an existing relationship with Google.

If some advertisers shift from PPC to PPA, it sounds to me like there will be a drop in PPC prices. Which in turn may lead to revenue problems at many advertising supported sites. Also, not every site is suitable for PPA - since they won't convert well (domain parking being an extreme example). It will be interesting to see if there is any impact on Google's short term revenue.

Money quote:

"Affiliate marketing networks like Commission Junction and LinkShare are screwed. These networks also operate on a cost-per-action basis, mostly with online retailers. Even though some of them have scale, they will not have the ability to compete with Google on sheer size of network."

AdBrite coexists with Adwords despite having a similar CPC model. CJ and LinkShare can either choose to have a head-on fight with Google, and lose. Or they can innovate to provide the same product (PPA) with a better service.

It's true that the market has room for more than one player. It's just that if one of the players is Google, and since Google is offering significant integration advantages with Adwords (see comment #4 on the techcrunch article), then CJ and Linkshare are going to lose serious market share. The "800-lb gorilla" title is going to shift overnight. They are in a pickle, to be sure.

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