Google Expands Beta for Pay per Action Ads - Some Implications of Google's New Program
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PPA changes the equation significantly between publishers and advertisers. Advertisers are no longer risking their money for something that might or might not happen; effectively, it’s the publisher that’s taking that risk. As one Webmaster World forum member pointed out, if an ad doesn’t perform, the advertiser is, in effect, getting free advertising.
Some have noted that this program should wipe out click fraud. But others have argued that it will merely change its form. What happens, for instance, if the customer completes the action but then changes his or her mind? Does that mean the advertiser does not have to pay out, or perhaps even receives a refund? That would be a fine day for publishers, when they have to watch their advertisers to make sure they don’t lie about conversions! Still, “refund fraud,” as it’s already being called in some places, would probably be harder to carry out, and certainly take a lot more effort than click fraud.
Some have predicted that this will be the final nail in the coffin for ValueClick and Commission Junction. In fact, David Jackson, who writes about Internet stocks for SeekingAlpha, reported on receiving an invitation to try Google’s early beta of the program (as a publisher) back in 2006. The day after he received the invitation, “soon after the market opened, I shorted ValueClick.” Jackson was probably right to do that in the long term, but ValueClick certainly isn’t dead yet. Some CJ affiliates have reported receiving a lot of support to help them improve their sites and make more sales. Will Google be able to do this? It doesn’t strike me as something that can be automated easily.
But aside from entering a whole new business area, Google has also stirred up some controversy with new its text link ads. Remember, these are not clearly marked as ads unless they’re hovered over, and because they’re text-based, they’re much easier to blend into the content of a web site. That blurs the separation between content and advertising in a way that is very similar to the pay-for-post blogging you may have heard about.
That poses a real ethical issue for Google. Those who take journalism seriously interpret “don’t be evil” in a number of ways, and “don’t chip at the wall between advertising and content” is one of them. Then again, does “don’t be evil” stretch to “don’t enable others to be evil”? That’s a very good question, but it’s likely to be lost in the advertising scramble.
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