Google recently introduced a beta version of an advertising scheme dubbed, “pay per action.” In short, you the advertiser agree to pay $xyz.00 for an agreed upon action, whether a sale, lead or other desired action generated through advertising on Google’s content network. Before moving on I’ll be amicable and offer the link to opt into the program if you’re a current AdWords advertiser. Google Pay Per Action Sign-up
Prying into the reasoning behind this product, anyone familiar with Google will clearly see the underlying logic. As a result of being the world’s choice provider of information retrieval, Google has been monetizing it’s ability to connect commercial interests with consumers. Further, this is accomplished through 2 channels. One being keyword targeted search, where an AdWords advertiser, one who they assume has done their due diligence and keyword research, ventures to bid on terms real people are really typing in. Upon this query Google displays (an impression) an ad written by the advertiser and if all goes accordingly, the searcher clicks through and reaches some sort of thank-you page at the end of the funnel. (satire included)
This is all dandy, but there’s another side to their business, which constitiutes roughly 40% of their revenue. A quick peak at their 10-q shows:
- “that growth in advertising revenues from our web sites will continue to exceed that from our Google Network members’ web sites. “
- “that we will continue to pay most of the Google AdSense fees we receive from advertisers to
our Google Network members.”
Forgive me for the poor image, but it’s telling if you click through to it. Revenue from keyword search is up as a component of their revenue stream. Content is down as a % of Goog’s revenue mix.
From an advertiser’s point of view content delivers mixed results. Many content partners who publish AdSense don’t have the highest quality content, just traffic to support publishing ads. The odds of an e commerce transaction being executed through the content network, as opposed to the search network are decidedly less.
As Google continues in their quest to monetize their traffic, although keyword search seems to be gliding along rather well, some improvements can be made elsewhere. Now with allowing advertisers to define what they’re willing to pay for some desired action, they will feel more at ease in blowing $$$ on Google’s content partners. With the content partner’s having a say in whose ads are displayed as well, this creates a more virtuous blend of advertisers being at ease, due to ad publishers being more scrupulous. All the impressions or clicks in the world won’t pay unless xyz is completed.
This also relates to Google testing Site targeting, or controlled content as I call it on a CPC basis. Myself, along with my colleagues have experienced many occasions where content leads to many impressions (see CPM) and yields few clicks. Doing the math, you might as well buy the seemingly more qualified click from a search query. So in the end, it’s the quality of the revenue for Google, and the quality of the return for the advertiser, which are simply different views of the same object.
Cheers! and don’t pay too much!!