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Google Adwords PPA Model a Threat to Affiliate Marketing?

I was reading about Google’s pay-per-action (PPA) model being rolled out for advertisers on WebProNews just now. Basically, advertisers can purchase ad space on a cost-per-action (CPA) model rather than cost-per-click (CPC) or CPM models where they pay per impression. By “action,” we mean anything from signing up for a service to buying a product after following the ad. Let’s take a quick look at it from a marketing perspective, and its potential effect on affiliate marketing.

Benefits to Advertisers

It seems that a CPA model would have a very simple benefit for advertisers. Simply put, they don’t have to worry so much about click fraud costing them money without conversions, because they only pay out when conversions actually happen.

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Your Thoughts on Google’s Pay-Per-Action Ads

Now advertisers can already use this kind of pricing structure through affiliate networks. Do you thinkGoogle’s making a wise move jumping into the fray, or should they be keeping themselves more focused on other areas of online advertising? Do you expect to see advertisers jumping from affiliate programs to Google’s PPA model (or at least slowly migrating, so as not to piss off their affiliates all at once), or do you think they’ll tend to be a bit wary of the idea of putting all (or a larger chunk of) their advertising revenue in Google’s hands? Do you think the PPA ads with Google are an answer to advertiser concerns over click fraud, or do you think the strong arms of Big G are infiltrating another ad arena just because they can? Share your thoughts! 🙂


  1. Dave

    PPA ads by Google will certainly be interesting. Its nothing new, but in the past has been associated with “get a free ipod for filling out 10 credit card applications”! It will be interesting how Google will break that stereotype to make it a legitimate form of advertising. On the flip side, its basically an expanded form of affiliate marketing, which is a widely proven form of advertising. Great post.

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