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pelican

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get paid to click stuff existed a long time ago..
 
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mole

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Yes, can, but how do you detect such sources from your regular web traffic?
 

DomeBase

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My guess would be that in the long run the "pay per click" model will not continue due to the ease of fraud and imprecision of measuring economic value. Will be replaced (and perhaps already is deep within the bowels of AdSense?) by referral commission on sales from click through traffic. Ultimately, it is sales, not click throughs, that generate value for the advertiser.
 

David G

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DomeBase said:
My guess would be that in the long run the "pay per click" model will not continue due to the ease of fraud and imprecision of measuring economic value. Will be replaced (and perhaps already is deep within the bowels of AdSense?) by referral commission on sales from click through traffic. Ultimately, it is sales, not click throughs, that generate value for the advertiser.

But the big problem with pay for performance models is that depending on what you are selling and its price, it takes on average approx' 7 visits (according to research I read about) to a website plus likely phone calls and/or emails before someone actually places the order. Usally a buyer only buys on the original click for very low priced stuff.

For example, say I was a stock broker advertising my services on a website named stockreports. It would be unlikely anyone would immidiately open a trading acct from the adsense click without lots of additional work and likely phone calls with questions and looking into the brokerage firm in more detail.

It's quite unfair if the buyer originally arrived via an adsense, then saved or remembered the url (or picks up the phone, sends email, etc), went back to visit the site directly several times, etc and then ordered but zero compensation.
 

DomeBase

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trader said:
But the big problem with pay for performance models is that depending on what you are selling and its price, it takes on average approx' 7 visits (according to research I read about) to a website plus likely phone calls and/or emails before someone actually places the order. Usally a buyer only buys on the original click for very low priced stuff.

For example, say I was a stock broker advertising my services on a website named stockreports. It would be unlikely anyone would immidiately open a trading acct from the adsense click without lots of additional work and likely phone calls with questions and looking into the brokerage firm in more detail.

It's quite unfair if the buyer originally arrived via an adsense, then saved or remembered the url (or picks up the phone, sends email, etc), went back to visit the site directly several times, etc and then ordered but zero compensation.

Your point is well taken, but in some respects this is a technical problem not an economic one. The technical problem is not being able to track the referral path. As technology advances, my hunch is that this barrier will erode and folks *will* be able to track the referral path more effectively and will be able to share value generated with those along the referral path. you may ask what would motivate a seller/advertiser to go to this effort and not just stiff the originating site? For the same reason that it is not wise to stiff agents or other referring parties -- because if you do then they stop sending business your way. So -- as technology evolves -- I think we will see continued movement toward profit sharing based on sales (not clicks) generated.
 

Luc

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DomeBase said:
Your point is well taken, but in some respects this is a technical problem not an economic one. The technical problem is not being able to track the referral path. As technology advances, my hunch is that this barrier will erode and folks *will* be able to track the referral path more effectively and will be able to share value generated with those along the referral path. you may ask what would motivate a seller/advertiser to go to this effort and not just stiff the originating site? For the same reason that it is not wise to stiff agents or other referring parties -- because if you do then they stop sending business your way. So -- as technology evolves -- I think we will see continued movement toward profit sharing based on sales (not clicks) generated.

right on. as a google adwords client i can honestly say that the PPC approach
is not going to work for very long. my company spends close to half a million
a year on google adwords and the conversions are not good.

we're now improving all stats tracking systems to figure out which keywords
and which search engines and referrers are best so that we throw less
money out the window. i know a lot of other companies that heavily
depend on PPC for traffic are doing the same.

i think the biggest problem with PPC, and Google Partners such as
DomainSponsor, Sedo, etc is that they only care about the click. all that
matters is that the click generates the most $$ for them. they don't
care what is being sold on the sponsors site because they don't profit
from that.

IF the partner worked not only on optimizing the most CLICKS but also
on optimizing SALES, then everyone would win. this of course would
be very hard and the traditional templated parking pages would have
to go. also, this method introduces a new problem in
which the seller could cheat by not providing accurate sales stats.

it's a tricky problem. but with these PPC bids going through the roof
something will have to change.

luc l
 

Ed30

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DomeBase said:
My guess would be that in the long run the "pay per click" model will not continue due to the ease of fraud and imprecision of measuring economic value. Will be replaced (and perhaps already is deep within the bowels of AdSense?) by referral commission on sales from click through traffic. Ultimately, it is sales, not click throughs, that generate value for the advertiser.

I think the measuring of economic value exists in a very sophisticated way at present. Yes, the bottom line is sales but to drive sales it's the same old story - you have to get the visitors there in the first place. The fraud problem will be overcome shortly, although I agree at the moment it is a problem - but not a big a problem as some people suspect.
Ultimately, companies need click throughs and that is why they are willing to bid ever increasing rates for them. Market forces are at work here. Ppc is here to stay in my opinion. It's up to the unsatisfied advertiser to get his house in order and work out, as Luc says, the terms and keywords that convert best and not the other way around.
 

Chaiki

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>>>as a Google adwords client i can honestly say that the PPC approach
is not going to work for very long. my company spends close to half a million
a year on Google adwords and the conversions are not good.


Ha ha ha... sorry for my outburst.

This is a very telling post. I predict PPC will be here in its present form, at enhanced bid prices, long after we all turn to dust. I further predict that the poster above will continue to bid for placement.. perhaps at only marginally increased levels, but only because the peer group bidding against him/her will be satisfied with lower than FAT returns that have been historically taken for granted. In fact, the only way ppc prices are coming down is if reliable high quality traffic generators (i.e. quality domain name holders) shift their traffic away from the network who's prices we are talking about to another model (see what happened at FWHT after ultsearch left the building). You can take that statement to the bank. Why?

PPC is a whipping boy. It is still much cheaper to advertise via PPC than it is via TV or Radio. TV and radio sell ad space based on flawed reporting data and unrealistic benchmarks. Television has something called ‘ratings week’ or “the sweeps”. During the coldest rainiest months, television networks broadcast programming that artificially inflates ratings.. (ross and rachel get married… brad pitt does a walk-on) it is ‘this week’ that sets the audience viewership benchmark for the ‘entire year’ (including the summer doldrums when people are outside at the beach); advertisers pay for traffic based on the flawed sweeps rate. Add in the TIVO factor and it becomes a justification nightmare. Radio is equally bad with predominantly elderly (not spending) people tuning in. The fact is that PPC offers too much ROI clarity and does ‘not’ allow for the mindshare billboard advertising (impression based) effect.

This thread kind of reminds me of the domain speculators who slag pool’s new auction system .. “I’ll never use them again” .. “They are driving their customers away” .. “they will be outa business in a month”, but those who know, know the dollars still roll in and the model continues to stand.

Watch the PPC bids and prices carefully. I will bet my two front teeth that in 12 months they are stronger and those doing the loudest complaining with be sucking it up and ‘paying’ to keep the traffic they 'need' to keep their businesses rolling along or they will grumble as their colleagues take poll position. "They must be losing money" will be the post of that day.

Fraud is an issue.. don't get me wrong, but worst case scenario Google has to cull their smallest webmasters who are screwing around to make an extra buck.. totally bush league chumps IMO .. don't have enough to loose.. Medium and large webmasters and domain aggregators are too busy cashing 5 figure checks to click on "beverly hills plastic surgeon" to make an extra buck. Diarize this thread. Watch what happens. ;)
 

DomeBase

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Chaiki said:
This thread kind of reminds me of the domain speculators who slag pool’s new auction system .. “I’ll never use them again” .. “They are driving their customers away” .. “they will be outa business in a month”, but those who know, know the dollars still roll in and the model continues to stand.

Exactly. Auction is an economically superior method of matching payment and value (and extracting payment from domainers as well!) than a fixed payment per backordered domain. Auction is a *variable* payment for catching a dropped name as opposed to a *fixed* payment.

Now. How does this apply to PPC? Well, profit sharing based on sales created by a click-through referral is a *variable* payment correlated with value provided as opposed to a *fixed* payment per click regardless of outcome for the advertiser.

I think that variable payments will tend to dominate fixed payments in both cases -- unless there are very strong reasons (e.g. egalitarian objectives for drops or technological limitations on tracking sales for clicks).
 

Luc

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well, i suppose if existing clients start to leave adwords bids
will go down and more will jump on the wagon increasing the bids once
again, in a never ending process of PPC. eventually though i think
something better might be developed.

when i said we're optimizing the pages, i meant SEO.

pool lost a lot of customers when they switched to the other hidden
model. than again, i don't think they care too much about customers
but rather on extracting maximum $$, which the new system does flawlessly.
 

A D

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Luc said:
well, i suppose if existing clients start to leave adwords bids
will go down and more will jump on the wagon increasing the bids once
again, in a never ending process of PPC. eventually though i think
something better might be developed.

when i said we're optimizing the pages, i meant SEO.

pool lost a lot of customers when they switched to the other hidden
model. than again, i don't think they care too much about customers
but rather on extracting maximum $$, which the new system does flawlessly.


Luc,

The problem is as your company drops out, their will be another on coming to fill it's place. They will try for a while, then they will drop out and the cycle will repeat. I have seen this happen for years already.

Adwords works best for a company starting up from scratch as it give sthem targeted traffic right away. They will need a good product to sustain the traffic afterwards.

Eventually Google and others will have to to pay per sale instead of pay per click. That will be the only way to keep advertisers happy.

-=DCG=-
 

peekaboo

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DotComGod said:
Eventually Google and others will have to to pay per sale instead of pay per click. That will be the only way to keep advertisers happy.

tv/print/outdoor/radio advertisers are not paying based on 'per sale' model either. they r also paying 4 impressions, and they have done so for decades and decades. yet, they seem 2 be happy.

imho, i believe that some models might be based on 'per sale' (which is also subject to easy manipulation), but the vast majority of internet ads will still be based on impressions, because the internet huge growth and gazzilionns of different websites peddiling different products/services will ensure that the only way most of these sites can be reached is via 'impression' based advertising. at least for time being.
 

DomeBase

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producer said:
tv/print/outdoor/radio advertisers are not paying based on 'per sale' model either. they r also paying 4 impressions, and they have done so for decades and decades. yet, they seem 2 be happy.

The technology to track the customer referral chain was not around during these decades... so this payment system was based on technological limitations rather than economic ideals. Where tracking the customer referral chain was possible (e.g. insurance agents, sales clerks, brokers, etc.) then payment for sales (commission) was economically preferable. The internet may be particularly well-suited for tracking referrals, moreso than billboards in the 1980s and 1990s...
 

peekaboo

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DomeBase said:
The technology to track the customer referral chain was not around during these decades... so this payment system was based on technological limitations rather than economic ideals. Where tracking the customer referral chain was possible (e.g. insurance agents, sales clerks, brokers, etc.) then payment for sales (commission) was economically preferable. The internet may be particularly well-suited for tracking referrals, moreso than billboards in the 1980s and 1990s...

nice answer, but it doesn't say anything. what was your specific point?
 

DomeBase

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producer said:
nice answer, but it doesn't say anything. what was your specific point?

LOL

Let me try my nifty translator v.7:

"The technology to track the customer referral chain was not around during these decades...so this payment system was based on technological limitations rather than economic ideals."

= can't tell who buys because of billboard, so can't pay based on specific sales

"Where tracking the customer referral chain was possible (e.g. insurance agents, sales clerks, brokers, etc.) then payment for sales (commission) was economically preferable."

= can tell who buys because of agent, so can pay based on specific sales

The internet may be particularly well-suited for tracking referrals, moreso than billboards in the 1980s and 1990s...

= will tell who buys because of internet, so can pay based on specific sales

Hope this helps. Translator v.8 is not cheap!
 

peekaboo

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DomeBase said:
LOL

Let me try my nifty translator v.7:

"The technology to track the customer referral chain was not around during these decades...so this payment system was based on technological limitations rather than economic ideals."

= can't tell who buys because of billboard, so can't pay based on specific sales

"Where tracking the customer referral chain was possible (e.g. insurance agents, sales clerks, brokers, etc.) then payment for sales (commission) was economically preferable."

= can tell who buys because of agent, so can pay based on specific sales

The internet may be particularly well-suited for tracking referrals, moreso than billboards in the 1980s and 1990s...

= will tell who buys because of internet, so can pay based on specific sales

Hope this helps. Translator v.8 is not cheap!


well, your 'translator' has just repeated yourself.

in my original post i explained my belief that some internet advertising will be based on commision, but that vast majority will still be based on impression. i also gave and descibed my reasons for such belief.

by the same token, what i wanted to hear from u, r your specific predictions about what will happen and not just the description of the mechanics... we all know the mechanics (and the possibilities) but what you make of 'em is my question?
 

DomeBase

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producer said:
what i wanted to hear from u, r your specific predictions

gee u r a hard 1 to please. if u want me to predict, i say big guyz will only seem to pay fixed $ per click -- but really pay variable $ 4 sales. i even go 4 it to say they do it now.
 
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mole

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producer said:
my belief that some internet advertising will be based on commision, but that vast majority will still be based on impression. i also gave and descibed my reasons for such belief.

To be honest, that is definitely not what the advertising industry thinks today.

Interactive advertising is the holy grail of ROI with the technological connections to make it transparent above all traditional media to link cause and effect. I'm not sure whether you have been following the trade, but impressions are the proven food of fools. But in the land of the blind, the one-eyed man is king, thank god for the blind. But what do I know?
 
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