PPC [Pay Per Click] is a huge market. There are many advertisers and business houses that make use of PPC. As an Internet marketing professional, you must be aware that under PPC, the advertiser has to make a payment when a person clicks on the ad. These ads are displayed in search results as well as on third party websites. The webmasters of these third party sites receive payments whenever the ad gets clicked. Hence, many a times site owners incessantly click on the ad so as to generate more revenue. In other words, it will not be wrong to say that the very operating premise of PPC has given a rise to click fraud.
A report that appeared in Marketingvox.com states that there has been a rise in the incidence of click fraud. The report states that, “Pay-per-click (PPC) industry fraud figures for the second quarter of 2007 increased a full percentage point from the previous quarter, reaching an average of 15.8 percent, according to Click Forensics, Inc.’s Click Fraud Index, MarketingCharts reports. The average click fraud rate of PPC advertisements appearing on search engine content networks, including Google AdSense and the Yahoo Publisher Network, was 25.6 percent. That’s up from 21.9 percent in 1Q07 and 19.2 percent in 4Q06.”
The above report seems to have created an impact on Google AdSense. Hence, they have initiated something known as CPA [Cost-Per-Action]. Here the advertiser has to pay only if the person who clicks the ad performs an action specified by the advertiser. For instance, if the advertiser states that anyone who clicks the ad should register for a newsletter, then that particular advertiser will make the payment only if someone who has visited the site by clicking a CPA ad, subscribes for the newsletter.
Experts feel that CPA might help to rein in the rising rate of click fraud. According to a report that appeared in CNETnews.com, “On the morning of day three here at Search Engine Strategies (”SES”) San Jose, Marissa Mayer, Google’s vice president of search product and user experience, gave her keynote presentation. She said a lot of interesting things, but of particular note to me was that she deemed cost-per-action (CPA) “the Holy Grail.” According to Marissa, Google is making moves towards cost-per-action as a more ideal auction-based pricing model, but she also pointed out that it’s a long way away.”
Thus, CPA might be the model of future. In addition, if you are one of the many advertisers who have had a harrowing time with PPC and click-fraud, then CPA might help you to get some relief.