Letter: Dramatic Search Marketing changes afoot

Rumblings of change from Google again commanded column inches in March.  And deservedly so.  The launch of Google’s (beta) Pay-Per Action (PPA) service, a new and advanced version of Pay-Per-Click (PPC) is set to dramatically shake up the Search Marketing industry.

PPA, unlike PPC, is a new pricing model that allows advertisers to pay only for completed actions, which are defined in advance by an advertiser. Instead of paying a fee every time someone clicks on a link or product, advertisers can now opt to pay a certain amount, that they set, for the action they choose – whether that be a lead, sale or page view. 

Suddenly makes PPC seem a little stone age doesn’t it? 

The change to PPA will align Google's interests much more closely with businesses – working far more like an affiliate model.  And Google will suddenly need to start working a little harder for its money as a result.

No longer will relevance and price be the only determinants of which adverts are shown. PPA means conversion will become a key factor that Google needs to take into account. Google will also need to take into account the probability that an advertiser’s site will convert the click into a sale. No sale, no income for Google. 

We see this model being popular with smaller companies and expect to see companies raise their CPA to the maximum they can afford in order to drive volume. 

The real key in PPA however will be the conversion rate from interested surfers on Google to sales on product websites.  Our advice is to upgrade your web analytics, implement and optimise landing pages through a thorough testing programme … and look again at your product pages and checkout process.

Matthew Tod
CEO, Logan Tod & Co.