Chao Lam

Working on the next small things …

Archive for June 2006

GBuy & CPA ads – the other shoe drops?

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My former partner Tom and I have always thought that Cost-Per-Action (CPA) based advertising was the future of internet advertising (targeted advertising was our schtick way back a decade ago). While Cost-Per-Click ads now form the bulk of internet advertising revenues, I’ve always been disappointed that CPA ads have not really taken off beyond affiliate networks.

Well, this may all be changing now: according to David Jackson at Seeking Alpha, Google is unleasing a CPA network.

A huge advantage of CPA ads is that it will get rid of click fraud for advertisers/merchants (who cares how many bots click on my ad, since I only pay when someone buys my stuff). However, I think a reason for the slower adoption of CPA ads is that ad publishers have to rely on merchants for truthful reporting (i.e. CPA ads can result in fraud going in the other direction)

However, this may all change with yet another rumored forthcoming Google product, GBuy. What if Google only allows CPA-style ads for merchants who use the GBuy payment system? Now, Google will have direct audit powers to know who views an ad, clicks on an ad and pays for an action after clicking the ad.

If I’m right, watch for GBuy and CPA ads to be tightly linked, allowing Google to be a fearsome competitor in yet another of eBay’s trinity of monopolies.

Written by Chao

June 24, 2006 at 6:36 pm

Posted in Uncategorized