PPC vs PPA

First it was pay for impressions and then Google came up with an innovative and revolutionary model of Pay Per Click.  I’m no historian but my guess is that the online advertising industry quickly embraced this model and made it almost defacto.

At the SearchCamp, some of the presenters were making a case for Pay Per Conversion or Pay Per Acquisition and some like Pinstorm said that all their contracts were based on results. All that sounds nice but this PPA would only relate to the Agency fees while the inventory would continue to be PPC whether to Google or Yahoo or MSN.  Certainly it puts a  constructive pressure on the Agency to perform and its really commendable on the part of Agencies to make PPA as their holy grail.

But having said that there is bound to be substantial inefficiency at the publisher’s end in terms of escalating cost of key words, undetected or unproven click fraud as well as poorly designed landing pages on the part of the clients just to name a few.

It would be quite interesting to know how the agencies that base their revenue on a PPA model would drive efficiency on the entire ecosystem and make a strong case for total outsourcing.

Mahesh! Would you like to start the debate?

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