Is Cost Per Action The Answer?

from the is-there-any-one-answer? dept

The idea of “cost per action” advertising, rather than “cost per click” is hardly a new idea. In fact, in many ways, it predates cost-per-click. Affiliate programs are, after all, just cost-per-action advertising. The advertising site doesn’t pay unless someone actually buys something (the action) and then then the publisher who pointed them there gets a cut. However, the concept of cost per action as an alternative to cost per click is about to get more attention thanks Bill Gross’s ability to take me-too ideas and promote them as new. He’s been working on the new search engine for a while now, but it’s raised some money, and he’s now trying to position it as the solution to click fraud — since cost per action isn’t as susceptible to click fraud. Snap wasn’t originally launched as a cost-per-action search engine. They only added that feature a few months ago, and have suddenly decided that’s their hook to get attention. Of course, they need to do something to get attention, because at the rate they’re making money today (yes, they do publish how much money they make), they have quite an uphill battle. And, it’s not clear that going cost-per-action is really going to solve that. Affiliate programs have been great for small businesses, but it’s not clear that you can really build a huge home run style business using the same model. Cost per action doesn’t make sense for all advertisers — especially those trying to build up a brand or attract interest in ways that don’t involve a direct purchase (though, you could make the argument that it makes more sense for them, since they’ll never pay out a dime — but that makes it tough for Snap to make any money). Either way, expect to see plenty of stories in the near future about why cost-per-action is better than cost-per-click — and you can bet that Snap’s PR effort is behind most of them.

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Comments on “Is Cost Per Action The Answer?”

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Beck says:

New Fraud

This can replace click fraud with transaction fraud. How does the search engine know that a sales transaction was completed? Wouldn’t click fraud just be replaced by thousands of mom-and-pop advertisers who fail to report completed sales?

Another issue is that people who are searching the Web don’t give a darn how the search company is compensated by advertisers. They just want good search results. can promise great benefits to advertisers, but the advertisers need to be where the eyeballs are.

CollectionRep says:

Fraud is rampant

The action most times is an order being placed or the like… The order does not need to ship or process to pay out.. therefore phony orders are placed using stolen or fake credit cards… We have been hit by this type of fraud repeatedly … Unfortunatly some of these orders do go thru to people who did not order and have no idea what is going on…

chamila (user link) says:


Has anyone out there heard about It seems like a way better service then wasting money on PPC. Apparently they are using refering websites ( forums, blogs, wiki, etc. ) and have a viral word of mouth distributed approach to it. My friend told me he got around 100 visits from single post which cost him $0.40c. I am going to give them a try today . In case you are intrested here is it.

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