by: Ilya Vedrashko

"Finally, a search engine offering true pay-per-performance advertising." It's not Google, though, which, it was leaked, is testing a new CPA (cost-per-action) format. It's Snap, created by the same guy who created Overture whose model was later adapted by Google.

The problem with CPA is that it shifts the entire burden of responsibility onto publisher, and it shouldn't. Publishers are responsible and should be awarded for impressions their sites generate (the old-fashioned circulation, if you wish). They share responsibility for click-throughs with "ad agencies" that create the ad; publishers' role is to position the ad unit on a page in the most effective manner. Publishers and "ad agencies" get customers in the door, but it's the job of the shopkeeper to close the deal. Publisher should not be punished for transactions that fail because of the problems on the shopkeeper's end, such as low inventory, confusing store layout or unfriendly service. Look, do you think my ad spread in Cosmopolitan should be free if it fails to move my bling even if my bling is worthless and the distribution system sucks? How many ads have you clicked only to be lead to a page that has nothing to do with the original offer?

The ideal system, I think, would be more like restaurant tips; the publisher would get some money for simply displaying the ad, some more if it clicks through, and a premium when the stuff sells.

And a few parting words of wisdom from the usability guys (they've been called gurus too many times now) Jakob Nielsen and Don Norman: "Now, it might be tempting to present your successful search page ad as a pop-up, or in a news site, or somewhere else. But if you do, it will simply be ignored because it isn't part of the goal: users now want to read the news, or do whatever it is that initially drew them to the site, and advertisements -- no matter how enticing or relevant to users' other interests -- will be ignored. However, when users complete their main task, they're then ready for advertisements. And guess what? The ads are gone."

Original post: http://adverlab.blogspot.com/2006/06/commentary-problem-of-pay-per-action.html

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