Google PPA Advertising – Affiliate-Eyez Killa!

21 03 2007

Google today made the announcement that they are testing their new pay-per-action (PPA) advertising product.

I’m sure the market speculation will continue furiously.  From TechCrunch and Michael Arrington, there’s a heated debate about whether this is a CJ and LinkShare killer.  Mike Arrington seems steadfast that CJ and LinkShare are smoked – others are launching accusations that he doesn’t understand the affiliate marketing space.

Andy Beal (Marketing Pilgirm) references a nice quote from a Google executive, “We think this is different from the traditional affiliate marketing industry.”  There’s reason to be doubtful of the whole truth of this statement.

From a publisher’s perspective: as I’ve at least hinted at before, affiliate marketing is something that is you either love or hate.  The reality is that certain business are suited best for CPA (conversion marketers, virtual salesforce- get the sales) and certain businesses will do best with CPC (content, community- anything NOT geared towards improving the odds of the sale later).

My Predictions for the shake out:

  • OPMs (outsourced program managers) are the new PPC professionals/firms.  With a new ad model to master for huge benefits, the OPMs will benefit greatly.
  • CJ, LinkShare, Performics, ShareASale all find a niche.  It will change the way that they do business.  It will wreak havoc unfortunately.  In effect, they need to become OPMs of the highest level.  All three to varying success have tried to enter the Paid Search Management business.  They’re smart enough to realize that these two businesses are now one in the same.
  • Eventual consolidation of CPA networks.  Google’s size has such a way of ironing out the inefficiencies in the market that I can’t help but think this will happen.  From my perspective, I hope that this weeds out the “filth” but using that word prudently.  Walk around Ad:Tech and count the number of CPA networks.  Does this need cleaning up?  Absolutely.
  • Affiliate Marketing as we know it is GONE.   It’s a horrible name, a hold out from old days of two-cent affiliate programs.  Affiliate marketing has grown up to the point where it at least can be termed “performance marketing” and can eventually cross over into the mainstream as an option for all businesses publishers.
  • Explosion of the PPA ad model.  If the way Adwords revolutioned (read: simplified through do-it-yourself) advertising for small merchants crosses over to PPA advertising, the PPA ad model will have endless possibilities.

I could go on and on, but need to look into Google PPA further for my own uses!  It’s great news from an advertiser’s perspective.  My personal hope is that it’s a positive step to explode the PPA market in a positive way that makes everyone (Big affiliate networks, CPA networks largely) rethink where they add value.

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