Seo is Optimized Promotion

Google Pay Per Action - explained

“Google Pay Per Action” is a conversion based affiliate marketing system, a conversion based type of “Google Adwords”. Instead of paying for clicks or impressions, “Pay Per Action” lets advertisers only pay when specific, self-defined actions are completed. “Pay Per Action” consists of three basic steps:

1. Advertiser creates ads and defines actions that need to be performed by the surfer (e.g. buy product, signup to newsletter)
2. Advertiser’s ads are displayed on affiliated websites from Adsense publishers who have chosen to participate
3. Advertiser pays only for completed actions

Advertisers need to install a tracking code at their website, which is verified by Google in advance.

Currently, Google Pay Per Action is in beta stadium, check it out here.

Google Pay Per Action Screenshots

Pay Per Action Conversion Tracking Setup

Pay Per Action Campaign Setup

Pay Per Action (PPA) vs. Pay Per Click (PPC)

Click Fraud

With the launch of “Google Pay Per Action”, Google shows that they are taking click fraud seriously. Conversion based advertising services are not vulnerable to click fraud like click-based advertising services.

Who takes the risk?

With “Pay Per Action”, the risk is shifted from advertisers to publishers. If a publisher sends traffic which doesn’t convert, not only doesn’t he make any money: He has invested his traffic, which equals, economically speaking, opportunity costs in the amount of the sum which he might have earned with an other advertiser or advertising method.

PPA from an Advertiser’s point of view

From an advertiser’s point of view, “Google Pay Per Action” offers more safety than the regular “Pay Per Click” scheme. If you define a specific sale to your products or services as action, it is easy to calculate how much you will be earning with it, and how much your maximum PPA bid for that action would be. However, just theoretically, if your site is converting exceptionally well, you might be making more money with a per click solution, this depends on individual PPA/PPC prices of course.

PPA from a Publisher’s point of view

From a publisher’s point of view, it is crucial that the advertised website converts well with the publisher’s traffic. Depending on the conversion rate, you will either be making more or less than with PPC. Like on marketing in general, the individual conversion rate strongly depends on the relation between the target audience and the product or service which is going to be sold. It is not possible for me to predict the efficiency of audience targeting for Google PPA, however, Google has proven before that their context-based ad placing technology is able to reach target groups efficiently.

PPA Spamming - is Google’s Pay Per Action system exploitable?

There might be a potential security risk in the PPA system due to the fact that advertisers might be offering products or services on their website which are not integrated into the PPA program. The fact that each advertiser’s website needs to be verified prior to participation does not inhibit the advertiser from adding additional non-PPA products or services afterwards - in the worst case hiding the defined actions to receive free traffic through PPA spamming. When this happens, advertisers make money while publishers are not getting paid, although it was their traffic that generated the revenue. Who monitors the advertisers’s sites to prevent PPA fraud? Google is famous for favoring automation over manual work, but I highly doubt that they can automat the monitoring of their PPA advertiser websites.

Will Pay Per Action replace Pay Per Click?

“Pay Per Action” is currently in beta stadium, and I haven’t tested it yet, so I can’t tell how well it performs. Due to the context-based adsense technology I do expect it to perform quite well in terms of conversion rates. Long term success of the PPA system will strongly depend on the level of participation from Adsense Affiliates, and their participation might be negatively affected if advertisers find a way to exploit the system.

However, I’ve seen per-click affiliate marketing systems replaced by conversion-based revenue sharing systems on very similar market conditions before. Not too many years ago, the very large adult internet industry started switching the advertising scheme for nearly all of their so-called “paysites” from per-click systems to revenue sharing systems as well, mainly for the same reason why Google is probably now launching Pay Per Action, to avoid click fraud and create a more reliable, sustainable affiliate marketing system.
Similarly, I expect “Pay Per Action” to gain the majority of the adwords market share - not right now and not too soon, but in the long run.