So, Google is "optimistic" about extending its test of a cost-per-action (CPA) payment model alongside its traditional cost-per-click (CPC) business. It’s a development that underlines the increasing importance of the CPA model as advertisers demand more and more accountability from their online marketing. This general trend helps to explain why the affiliate marketing sector, which already pays out on a CPA, has been one of the fastest-growing online segments for the past few years. However, concerns that Google’s move presents a threat to the traditional affiliate marketing industry are hyped.
For a start, Google’s approach to advertising has always been a very automated one. The AdSense product, to which the CPA model will first be applied, was very much meant to be a "plug-and-play" solution to help publishers to monetise their sites. And while the CPA payment model will now mean advertisers only pay out if someone comes to their site and buys, it will do nothing to actually tell them how to improve their conversion or site performance. Affiliate marketing networks today take a very different approach.
At Buy.At we also use our technology to support our publishers and advertisers, but we complement it with a high-touch level of service. We work with our advertisers on choosing the right creative, constructing efficient landing pages, positioning their products appropriately on affiliate sites, and improving their acquisition funnels.
Secondly, most affiliates that already participate in the industry today have grown significantly in terms of sophistication and variety. A typical campaign through the Buy.At network today will see traffic driven from pay-per-click affiliates, search engine optimisation affiliates, verticalised content sites, affinity or reward sites, shopping comparison engines, e-mail marketers and more.
Ultimately, Google’s entrance into the CPA market is an endorsement of the business model that has fuelled the success of affiliate marketing networks to date. However, its "plug-and-play" approach will leave plenty of room for the existing affiliate industry to continue to grow.
Kevin Cornils is chief executive of Buy.At