Google Graduates from Cost Per Click (CPC) to Cost Per Action (CPA)
Yes, that is right. Cost per action (CPA) might not be the most innovative thing in Internet advertising. But, if Google is doing it then it probably is something worth looking into. Here is some coverage by Techcrunch abiet using the term Pay per action (PPA) instead.
Google announced the testing of a new pay-per-action, or PPA, advertising product today. It’s important for a number of reasons, not the least of which is the fact that Google controls so much of the online advertising market that just about anything they do in advertising has real consequences around the Internet.
For those of you who are not familiar with the terms, here are some short definitions of the three (3) most popular advertising models in the Internet.
- Cost per impression (CPI) - An advertiser pays for an ad when it appears on the website or in Internet content. This technique is applied with web banners, text links and e-mail spam.
- Cost per click (CPC) - An advertiser only pays for the ad when the ad link has been clicked. This is the pre-dominant Internet-based advertising model and is used by major players Overture and Google.
- Cost per action (CPA) - An advertiser only pays for the ad when an action has occurred. An action can be a product being purchased, a form being filled, etc. The desired action to be performed is determined by the advertiser.
From the company that made millions with CPC when the world was doing CPI, Google is now trying out CPA. This definite says something about the CPA model. Will this signify the end of click fraud? Probably not. Fraudsters will probably find a way around this too.
