Google is an advertising company. I know they build a plethora of consumer and business applications, but their main moneymaker is advertising to the users of their products, not the sell of the products themselves.
At first we thought the medium risk would be to travel into the different parts of the globe and be a would wide company. The problem? They already did that. And they are talking publicly about pulling out of China, but yet to do so.
So, with Google already dominating the world, what would be a likely medium risk action that will yield them Billions of dollars? Three letters, CPA!
CPA means cost per action. Google is already the global leader of cost per click advertising (CPC) or price per click (PPC) with 66% of its revenue from CPC. (PPC = CCP)
Google is yet to venture into CPA advertising. There is an option in the settings to tell Google Adwords, Google’s PPC program, how much you want to spend on every acquisition of leads you get from Google’s PPC program, but it still is PPC and Google does not guarantee the cost per action.
So does Google have a true CPA to offer their customers? NO! They need to though… It would help customers tremendously save money on advertising and help raise more money for the Absence partners. (Adsence, not Absinthe, is Google’s affiliate program to have other website owners advertise for their clients.)
If Google introduced a CPA program to its customers, it could potentially double the amount of business it currently does. Companies that regularly use CPA will look to Google as an additional advertising source for their company. And, advertisers can pay per lead rather then having to pay for a click when the person who clicks leaves the site right away. That is called a bounce in web techie speak.
Some issues with CPA advertising have been raised in the past though, which is why it is a medium risk.
One of the issues is the potential for spamming. Spammers could consistently sign other people up, without their permissions to the email list, or free trials while the spammers get paid for every lead they provide the advertiser in the CPA program. This is the primary reason why Google has yet to venture into this market, and why they probably will never venture into the market of CPA.
CPA is very lucrative though, with company’s like Flowers.com and E-Harmony.com there is big money in CPA.
How does Google prevent the CPA fraud? I don’t know, but probably the same way they deal with PPC fraud. PPC fraud is when a adsence partner is running advertising on their website and they consistently click on the adds on their site to make money from Google and their advertisers. This is fraud because nobody who is interested in the ad is actually clicking on it, its just the person who owns to website so they can make money.
Google can counter act this by seeing what IP addresses click on the advertising and therefore can see multiple unnatural ads clicking from one IP address. The best thing to do is not to click on your own ads.
CPA is a tough decision for Google. Will they go that route? They will make a bundle is they do.
