YouTube Decides That Cancer Examination Videos Are Too Explicit

Google Announces Pay Per Action Beta... And Something Else Which You Can Just Ignore

from the look-the-other-way dept

Tue, Mar 20th 2007 8:01pm — Joseph Weisenthal

The idea of "pay per action" or "cost per action" advertising has been talked about for some time. The basic idea behind it is that an advertiser only pays if someone actually buys something or performs some action after clicking on the ad. For this reason, it's been suggested as a solution to the click fraud problem. Bill Gross' Snap.com search engine relies exclusively on this model, in the hopes that advertisers worried about click fraud will opt to advertise on it over Google (unfortunately, the model doesn't really affect users at all, so it can't help the company gain market share). Today, Google announced that it will dip its toes into the pay per action waters for the first time, as it will run a limited beta on third-party sites. Obviously, Google has a significant problem with click fraud, so it makes sense that the company would at least experiment with this model. What's also interesting about the announcement is that as part of the beta, the company will allow publishers to embed link ads within their normal text. These kinds of ads are fairly controversial and often irritating to users because they appear as regular hyperlinks (sometimes they're underlined twice so that they appear slightly different), but they are in fact paid links that send the user to the sponsor company's page. What's not clear is why Google has decided to lump these two things, the text link ads and the pay per action beta, into the same announcement, since the two really have nothing at all to do with each other. It seems possible that Google knew the text link ads might elicit a negative response and so the company decided to mask that with the other announcement, knowing it would get overshadowed. Whatever the reason is, it seems very unlikely that Google will change its bread and butter model any time soon. Even with the click fraud, it makes way too much money to tinker with things in a major way.

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18 Comments

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RandomThoughts, 20 Mar 2007 @ 8:09pm

Not sure if it has changed recently, but last time I checked, about 99% of Google's revenues came from click advertising. Would take a lot to consider "fixing" their golden goose.

I have never heard that Google has acknowledged that click fraud was a big problem, course, maybe for them it isn't. Their customers might have a different opinion.
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Search Engine WEB, 20 Mar 2007 @ 8:31pm

The Adsense Blog Posts about it
http://www.google.com/ads/adsense/referrals/index.html
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Mark, 20 Mar 2007 @ 8:43pm

Excellent
Now I can get the $2.00 referrals instead of the $.04 click through revenue. I have to admit though, there are 4 - 5 days out of the month where our visitors click through on the $1+ click ad links - those are good days. (or desperate advertisers)
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Anonymous Coward, 20 Mar 2007 @ 8:54pm

Hopefully this will encourage advertisers to create more interesting and engaging advertising, something full of content that we would enjoy watching. I feel like this kind of model would certainly work for entertainment sites, movies sites that draw you in through the ad (pay per click) and have a product (movie, game) that you can play for a price online.
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gaman, 20 Mar 2007 @ 9:06pm

I don't think it works like the irritating IntelliTxt with double underline where you can embed it somewhere in your paragraph for unwitting readers to click on.

I think it will work like CJ and Google will impose certain requirements to separate content from ads.
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Scott, 20 Mar 2007 @ 9:39pm

pet peeve
I think you mean to say "elicit". "Elicit" is a verb that means to provoke, "illicit" is an adjective which means unlawful or immoral. Great site, but such basic grammatic errors detract from the overall impact. (dons flame-proof suit)
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|333173|3|_||3, 20 Mar 2007 @ 11:49pm

text-link ads
they aren't so bad if the ads are clearly different from the normal liks, like the ones on tom's hardware. (i can't remember what company's sydication it uses). On that site, the ads are green, doulbe-underlined, and if hovered on for about five second produce a ballon with a longer advretisement text.
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|333173|3|_||3, 20 Mar 2007 @ 11:50pm

One more thing
Google could charge far more for pay-per-actio ads, since there is no click-fraud on them.
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Phil, 21 Mar 2007 @ 2:34am

Conversion Fraud
There may not be click fraud, but what about conversion fraud?
If one advertiser offers a pound for every email signup, whats to stop me outsourcing to India or somewhere to get thousands of thousands of emails (whether nonsense or not) entered into the advertiser's site through my adsense link?
Using the same methods as click-frauders (different proxies, IPs etc) it could work VERY well....
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Scrotorrrrrrrrrrr, 21 Mar 2007 @ 4:54am

The Devil You Know
Great, so let's just exchange a publisher fraud problem with an advertiser fraud problem. On the one hand, click fraud is pretty widespread, but it's also easy to detect and Google's very good at detecting and not paying out on fraudulent clicks. On the other hand, advertiser conversion data is a lot easier to underreport for the advertisers, and if an advertiser is being dishonest and not showing their conversion tracker 100% of the time, it's a lot more difficult to detect.

For an ad network like Google, it's a lot easier to track clicks than conversions, especially as the scale of the network increases. You have to check tracking pixel placement for every ad you place to even try to keep advertisers honest, and even then if an advertiser is only showing your tracker 85% of the time, there's a good chance that when you test for placement that you will see your tracker.

In the end, I think Google will wind up sticking with the devil it knows.
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stubsy, 21 Mar 2007 @ 6:12am

Pay Per Action Ads
Surely publishers won't be to keen on pay per action ads?

It'll surely reduce googles revenue aswell.
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Anonymous Coward, 21 Mar 2007 @ 7:45am

It turns out to be easy to 'do no evil' when you get to interpret what evil is.
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Terry Whalen, 21 Mar 2007 @ 4:33pm

Re: The Devil You Know
I think you are dead on.
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Anonymous Coward, 21 Mar 2007 @ 6:58pm

why Google has decided to lump these two things
Because it's another opportunity for the surfer to click on an ad.

Phil, if they don't pay for the product, there is no commission - or there is a charge back. Either way, no problem - although there can be others.
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MPMsoft! Medical Billing Software Systems., 21 Jun 2007 @ 10:22am

Google Ad Service
The government should hold such massive communication utilities such as google and yahoo accountable to the same rules that other public infrastructures must follow. These communication giants play such a pivotal role in the internet yet are completely unregulated -- no outside rule whatsoever. When we MPMsoft suspected fraudulent clicks and reported it to google they investigated but found nothing. We make patient accounting software for medical practices and had clicks originating from gaming sites --no problem here. Until public utilities like google are regulated by federal rules there will be only caveat emptor.
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MPMsoft! Medical Billing Software Systems., 21 Jun 2007 @ 10:30am

Google Ad Service

The government should hold such massive communication utilities such as google and yahoo accountable to the same rules that other public infrastructures must follow. These communication giants play such a pivotal role in the internet yet are completely unregulated -- no outside rule whatsoever. When we MPMsoft suspected fraudulent clicks and reported it to google they investigated but found nothing. We make patient accounting software for medical practices and had clicks originating from several bogus sites --no problem here. Until public utilities like google are regulated by federal rules there will be only caveat emptor.
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geri, 14 Jul 2007 @ 2:37pm

PPA
As a self described "white hat SEO professional I have never used PPC programs. It's kinda like it's a religion taboo, if you will... However, I think PPA is the wave of the future. I have been waiting for this natural progression to occur.

I have always considered paying for a visitor to be a waste of time. I've clicked on lots of sites never intending to buy anything. So paying for visitors made no sense to me. However, paying when someone actually pay is just another cost of doing business and I CAN LIVE WITH THAT.

Since I have never used AdWords I will have a long wait before Google's PPA becomes available to me... Oh, darn....
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