Searching Beyond the Paid

Wednesday, March 28, 2007

Google Adwords Pay-Per-Action: Early Thoughts

Google Adwords seems to have all the bases covered in online marketing. They have the core product, Adwords, going strong on a CPC model. They have site targeting for Adsense advertisers on a CPM basis (and CPC too, currently in beta). And now, they've announced that they're beta-testing a pay-per-action (PPA) program via Adsense, as well.

Coverage of this new move abounds: Barry, Ben, and Chris discussed it in Search Pulse, and Barry also has screen shots and some good reader comments at Search Engine Roundtable. Brad Geddes, aka eWhisper, has posted a step-by-step guide to creating PPA campaigns. Discussions are happening on all the major search engine forums. Some people are ecstatic about this program, and some are fearful that it'll unseat the current leaders in affiliate marketing and lead to further world domination by Google.

All speculation aside, here are my thoughts on the program initially. We've been part of the beta for a while now, but I've just started setting up campaigns and ads. One thing I learned from my Adwords rep is that I have to get out of the PPC mindset when choosing keywords. I've worked with PPC for so long that I instinctively stay away from high-volume, generic-type keywords that I know will drive tons of traffic and few conversions. In PPC, obviously, this doesn't work. But PPA is a different animal: since we don't pay for clicks, why not fill the bucket with as many visitors as possible? Even if only one out of 1,000 converts, we only pay for that one!

So, with that in mind, it's been fun creating these ad groups. For example, for our Playboy Magazine PPA campaign, I've been able to pick keywords like "playmates, bunnies, girls next door, centerfolds" and a myriad of other fun keywords that I've actually negatived-out in our CPC campaigns! Same thing with high-volume keywords for other, tamer magazines like Family Fun, Birds & Blooms, and Guns & Ammo. (OK, maybe Guns & Ammo isn't tame, but you get the point.)

I will say that traffic from these campaigns, so far, has been underwhelming to say the least. We've had a few impressions, but no clicks yet. Unlike a traditional affilate program, I have no way of knowing which sites, if any, have picked up our ads. I don't so much care about specifics, but I'd at least be curious how many sites are showing our ads.

This lack of transparency, at least initially, is one reason why I don't think traditional affiliate programs are doomed. Google's program is a great way for advertisers who might want to try out this type of advertising, since it's self-serve and runs on the familiar Adwords platform. For advertisers like us that already have affiliate programs, it will (hopefully) provide a good source of incremental business. For the affiliates, it's another way to monetize their web sites. But I don't see it replacing the giants like Commission Junction, LinkShare, or even Adsense's CPC program. It's just one more option for advertisers to choose.

I'm curious to see what other beta testers' experiences are. Is anybody getting decent traffic? Is any of the traffic converting? Post your comments!


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