Given the track record of Google and the amount of resources that they can allocate to any new project that they become actively involved in, it does not take a rocket scientist to work out that whatever projects Google choose to put their weight behind will inevitably become a big thing on the net.
It, therefore, follows that if you are an internet marketer or conduct any of your business online, you should also be taking a good, long look at the same things that Google is looking at right at this moment.
It bears repeating that PPC advertising has been phenomenally successful over the last five years or so, but you should also understand that the PPC advertising model is not without its flaws.
In fact, PPC advertising was first launched onto the World Wide Web back in the dot-com days of the 1990s. However, most of the major players of the time decided to pull their PPC programs from the market pretty quickly because of the problems that they had with them. And, perhaps most surprisingly, the same problems that plagued them back then are pretty much the same ones that are still with us today.
The primary flaw that was evident back in the ‘90s that are still with us today is that of click fraud.
This takes many different (and increasingly sophisticated forms) but here is a very simple click fraud example.
Because AdSense is largely computer managed, it is relatively easy for a less than honest Webmaster to set up websites for no other purpose than the delivery of AdWords ads. He or she then creates their own artificially generated traffic by using what are known as 'hit both' (computer generated hits) on their ads.
They get paid each time ‘someone’ hits their ads and so this can be an extremely lucrative operation, one which costs them very little in terms of either money or time. Now, of course, this is a very simplistic view of how click fraud works, and equally obviously, the large PPC networks like Google, Yahoo and MSN have sophisticated systems in place to detect such attempts to defraud them and their advertisers. Unfortunately, it is usually the case that the fraudsters are one or two steps ahead of the fraud detectives, and therefore this is a continuing and increasingly problematical situation.
For the large players like Google and Yahoo, it is also a very expensive problem, as they have to spend more and more money on trying to prevent click fraud as one vital element of protecting their own business interests, as well as those of their advertisers.
But this problem has been around for at least ten years now, and it seems that even mega-wealthy monolithic corporations like Google have still not found a complete solution for the problem. It therefore seems reasonable to question whether anyone can ever find a perfect answer to the problem of click fraud, and perhaps even to suggest that the answer to this question is most probably a resounding and somewhat depressing ‘no’.
PPC advertising can be extremely expensive as well. As an advertiser, you pay every time someone opens or views your ad, even though no sale is made. You could therefore potentially spend thousands of dollars in advertising using PPC and never make any sales!
It is also worth remembering that many businesses in the world’s most developed economies are struggling financially, and therefore having to impose budget cuts because of steadily falling profits.
These companies, who between them represent a significant portion of the online advertising community, are finding it increasingly difficult to establish a clear return on their investment from certain types of online advertising. The nature of PPC advertising, in particular, makes it difficult to establish a clear and direct link between revenues spent on advertising and sales directly generated from doing so.
For all these reasons, Google (and therefore the rest of the internet advertising business community) is beginning to look beyond the PPC advertising model to explore the opportunities offered by what is variously known as Cost Per Action or Cost Per Acquisition advertising. Whichever phrase you choose to use, this form of advertising is universally known as CPA. Everyone else is looking at CPA advertising as a viable alternative to PPC, so let us do the same throughout the rest of this course.