Google CPA Chatter

New Flash! CPA is the Holy Grail! That’s right, you heard it here first. Well maybe you didn’t hear it here first. I have been reading in quite a few blogs (hi Shawn, hi Vinny) how Marissa Mayer, Google’s vice president of search product and user experience, stated at SES that CPA is “the Holy Grail.” And now the whole world is predicting the end to affiliate marketing as we know it (not you Shawn, not you Vinny).

CPA is the Holy Grail? Of course it is. We have all been preaching this since the late 90’s when affiliate marketing got off the ground. I remember having to explain it to people three or four times before the light went off in their heads and they suddenly understood it. Why pay for impressions or clicks when what you really want are actions? Of course you can always back out your CPM or CPC to a CPA but if the numbers do not work out to your CPA target, you spent too much money and it’s too late.

The main difference I see between what Google is trying to do and a more traditional affiliate program is how they are managed. A Google CPA campaign is managed as a media channel with no insight into who is promoting your offer(s) - just big picture ROI - like their current CPC channel. An affiliate program is more about optimizing relationships and offer placement across multiple opportunities (webpages, keywords, email, etc.) as well as building relationships with the publishers/affiliates. Additionally, merchants can pick and choose or even recruit specific sites to promote their offers via an affiliate program. This doesn’t seem to be the direction that Google is going. They primarily offer you all or nothing with very little filtering options when it comes to who is promoting your offers.

In my option, Google’s CPA channel has very little to do with affiliate marketing other than some affiliates will also promote these offers in addition to the multitude of other offers available to them from other ad networks, CPC networks, CPA networks AND affiliate networks. Likewise, some merchants will also use the Google CPA channel to drive sales or leads but not in replacement of a traditional affiliate program - but as another incremental channel to grow revenues.

Only time will tell if I am right about all this. The good news is I am rarely wrong, so hopefully you can all just take my word on this and move on to discussing social networking or some other important web 2.0 subject.

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