Well, I'm perhaps the very last person in the Blogosphere to write about Google's CPA network. I've totally missed the wave of news about this topic, but I've been busy – conferences, holidays, and least I forget LMB who pays me – and to be h…

Jellyfish.com, an affiliate cashback site, has launched with coverage by John Battelle, ClickZ, Infoweek, and of this post has over 400 diggs at digg.com. Many of these sites are calling this a "new" ad model that will challenge Google's …

However, while I now agree with you that Google will be in a different line of business than that of the affiliate networks, I do still think that their number crunching approach could deliver on less wasted space and thus make it both easier (no understanding what works and what doesn't) and more profitable for affiliates to just hand over their 'cold' 'advertising' space to Google while continuing to use the affiliate networks for the more 'personal' and 'recommendation-like' links.

2) Affiliate Managers give increased commission to affiliates based on performance or better placement. Though Google may build something to facilitate this, it is usually something accomplished via the relationship the affiliate and merchant have with each other, and I'm assuming the restrictions on the way AdSense is displayed on a page may make this much more difficult as well.

3) I do think Google is having problems with click fraud, but I don't think most merchants care right now. If they start to pressure Google to fix the problem, it will not be too difficult to fix using technology (Litmus Media has a solution, for instance). There is fraud in CPA as well, and it usually requires more than a technological fix — if it could be automated the networks would have figured it out by now; it usually needs a close monitoring of affiliate activity, chargeback rates, cookie overwriting, click to sale time, and other factors combined with transparency into the affiliate channel.

Even if a good percentage of merchants were willing to allow Google to track their sales, they would still have to make a decision between Google and a network provider that had a lot more flexibility in the ways affiliates could push traffic. If they want to use Google and a traditional network together, then they are faced with the potential of double CPA payment on the same sale,and that combined with Google's inexperience in this space could cost a merchant a lot of money, much more than they are losing to click fraud.

In all cases, Google can only beat the traditional networks if they can figure out a way to scale what the networks currently do to Google's huge advertising base. They can only scale it if they can convince those merchants to let Google handle the sale, figure out a technological fix to CPA fraud, greatly expand the AdSense system to allow more traditional affiliate links, and allow much closer relationships between advertiser and publisher than is currently possible in their system. On top if that, all good affiliate programs need management, and that management is usually outsourced to the provider or to a third party manager that will require much of the functionality that Google doesn't yet have. If Google's goal is to beat the traditional networks, it would make more sense to buy an established provider and scale things that way then to try to convert AdSense into CPA.

1)why do you say this isn't about datafeeds? don't they have feeds with Froogle? Couldn't they decide to do some serious number crunching and put the right product in the right place automatically instead of leaving it to the affiliate to figure out what works and what does not?

2)why do you rule out increased commissions for the best performers? I wouldn't be so sure. O n the contrary, I think it's just a matter of time.

3)CJ used to make a lot of money from ppc, too. But they had their hands full of figuring out which clicks were legitimate and which were not and decided to stop the ppc model altogether (only to resume it later on but only in part and only on large and reputable websites). Maybe Google is having as much trouble (or more). Or maybe they think they can make MORE money by offering a pay-per-action model for merchants (big offliners, for example) they trust and they can track with their own technology.

Massimo

Google's latest announcement that they will start testing cost per acquisition (CPA) advertisements has perked up the ears of the affiliate community. David Jackson appears to be the first to layout the Google CPA plan by which Google will start…

Google’s jumping into affiliate marketing with their Adsense team’s un-announced new initiative they’re calling the “Content Referral” network.

Google sent out on invite to some of their publishers to test. In short, th…