Last night, after market close, I received the following email from Google's AdSense team:
The Google AdSense team would like to invite you to test a feature that provides you with a new way to earn revenue from your website by hosting ads that are compensated based on a Cost-Per-Action [CPA] basis. These ads are very different in that you will be able to choose amongst a selection and you will also have more flexibility in promoting them...
The attachment contained the following:
How do I participate in the CPA test?
Simply reply to the invitation email and express your interest in participating and we will send you some sample CPA ads. You can then choose which ads you’d like to host and we will send you the code to copy and paste on to your site. It’s just that easy!
What can I do to optimize my revenue from the CPA ads?
While we encourage you to experiment as much as possible with these ads on your site, here are some general tips on implementing a CPA ad:
1) Ads that blend in with the site and are placed prominently tend to perform better. Look to integrate the ad within the page.
2) Ads that are relevant to the interest of your site visitor also tend to perform better. For example, if you have a travel site, having ads relevant to airline travel would generate higher interest. For more tips on increasing revenue, please see our optimization tips page at: https://www.google.com/support/adsense/bin/static.py?page=tips.html&sourceid= aso&subid=ww-ww-et-asui&medium=link
How do I get paid?
You get paid whenever a site visitor clicks on the ad on your site AND performs a specified action, such as generating a lead or purchasing a product.
Do these compete with regular content ads?
These ads will not compete with contextually targeted ads. Instead, they will show across a separate network, the Content Referral network. To place one of these ads on your site, you can set up a new ad unit that supports any of our current ad unit sizes.
How much could publishers expect to earn with this CPA test?
How much a publisher will earn will depend on a number of factors about the publisher and advertiser, including whether the ads match the topic of the site, and level of interest of their site visitors. We have tried to match the appropriate publishers with advertisers for this test.
Will CPA offerings compete with my current AdSense revenue?
We expect that the CPA test will offer ad units that will expand publishers AFC revenue because the ad units are separate and appeal to different types of users. These CPA ads are also additional inventory to your existing AFC ad units.
How can I promote the CPA ad unit?
Since this is a test and these CPA ads are not regular ad units, we are giving you more flexibility in saying things like "I recommend this product" or "Try JetBlue today" next to the CPA ad unit. However, you should still not incite someone to click on the ad, so saying "Click Here" is not ok.
Where do these CPA ads comes from?
The CPA ads come from a limited group of high quality advertisers that are interested in displaying ads on a CPA basis. They pay you whenever a site visitor performs a specified action, such as generating a lead or purchasing a product.
Will I be able to see reports within my account?
When the test begins, you will receive weekly email reports of conversions you have accrued and your total revenue within the CPA test.
In other words, Google is launching a fully-fledged cost-per-action -- otherwise known as affiliate marketing -- network.
Let's not mince words. This is Google's ValueClick (VCLK) killer. Google has greater resources than ValueClick, a larger advertiser base, and the advantage of being able to offer publishers a full range of ads based on page views [CPM], clicks [CPC] and now actual purchases or leads [CPA]. Google can translate the performance of all these ads into "effective CPMs", allowing publishers to compare and optimize for whichever type of ad produces maximum revenue.
This morning, soon after the market opened, I shorted ValueClick. Stock buyback or not, this spells the end of ValueClick's Commission Junction business.
Full disclosure: short VCLK at time of writing; may cover at any time without notice.
Did you know? Seeking Alpha selects and aggregates content from over 400 stock market bloggers and money managers. You can get Seeking Alpha articles about Google or any other stock in your portfolio emailed to you on publication. Or you can get the One Page Annotated Wall Street Journal Summary emailed to you every morning before the market opens. We don't spam, never sell email addresses, and there's easy-unsubscribe in every email. Sign up here.