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Since Google introduced the cost-per-click pricing model within Google AdWords the search engine giant has managed to cash in on it’s online traffic tremendously. The online advertising industry has experienced a great deal of growth, looking at around 40% each year in the UK leading Google to the position of number 1 generator of advertising revenue.
As Google look for the next big thing within internet marketing CPA cost per action model is starting to be adopted.
Affiliate advertising schemes moved across from the CPC cost per click model to favour a cost per action model to combat click fraud. Click fraud is one of Google AdWords biggest concerns so using the cost per action model will eliminate this and provide additional confidence for advertisers.
I’m still unsure where the search marketing business is headed, but here are both sides of the story:
Benefits of CPC
Cost per click allows advertisers, consultants or affiliates who have developed a good knowledge of Google AdWords an advantage over people with little skill or experience. This allows Google to reward relevant and well written adverts in an attempt to provide visitors with a high quality bunch of links on a search engine results page.
Benefits of CPA
Click fraud is a problem within search engine marketing increasing the number of clicks advertisers pay for that do not convert. If click fraud continues to grow, advertisers may demand CPA from the big search engines.
If Google decide to transfer the quality score model across with the CPA model I can see a huge potential and a huge improvement in the quality of websites. Currently within the cost per click quality score model users are judged on the click through rate (relevance of keywords, adverts and landing pages also included) if the cost per action (CPA) is developed in a similar way perhaps the conversion rate will also be included within the quality score and/or the CPA amount paid.
The big three become the big two, not quite true with a 87% market share in the UK Google have always been followed by the smaller alternatives Microsoft AdCenter and Yahoo Search Marketing. However, the latest twist in the Yahoo saga has seen the search engine agree to display Google AdWords results next to their organic search listings.
Although this is only planned for the US and Canada at the moment how long will it take for the process to move across to the UK? In the US Google have a 68% market share with yahoo next in line with 20% the new agreement may enable the search giant to obtain almost 90% of the US market. In the UK it is a different story with Google already having a staggering 87% however, incorporating Yahoo’s 4% share this would move them to over 90% market share.
Your Thoughts