Home Google’s CPA Move: Will Microsoft & Yahoo Have To Buy Their Way Into CPA Game?

Google’s CPA Move: Will Microsoft & Yahoo Have To Buy Their Way Into CPA Game?

One of the big pieces of news this week was Google announcing
their CPA (Cost-Per-Action) product, or as they’re calling it – PPA
(Pay-Per-Action). There are good analysis posts about the news from Techcrunch
and Microsoft’s Don
. It’s been expected
for some time now that Google will move into CPA, as a lot of people in the
industry view CPA as the holy grail of online advertising. But to step back a
bit — what is CPA? As Ebrahim
Ezzy wrote on Read/WriteWeb
last August:

“In contrast to the CPC Model, which seeks to drive a high volume of
traffic to the advertiser, the still-emerging CPA model provides
action/acquisition opportunities by offering financial incentives – usually in
the form of a revenue share percentage – to publishers. Incentives are solely
based on actions such as acquiring qualified database entrants (e.g. opt-in
email), driving sign-ups, downloads, inquiries or ultimately acquiring paying

Ebrahim also noted that CPA is optimal for advertisers, but it is a risky
proposition for publishers. Therefore Google will be able to charge a lot more
to advertisers for CPA. It’s also important to note that Google is far from the
first to move into this space – affiliate advertising networks like Commission
Junction and LinkShare have enjoyed good revenues from it, plus web companies
like Snap and Turn.
However Google’s presence validates CPA in a big way.

To my mind, the big question (apart from will CPA actually work?) is how
will Google’s main competitors in online advertising respond
? As Ebrahim
back in August, Google’s competitive advantage is its network size. So
really the only companies capable of competing with Google in CPA are Microsoft
and Yahoo.

Will Yahoo’s Panama have CPA? I haven’t found any confirmation of that, but
John Slade (Senior Director of Yahoo Global Product Management) told
Lee Odden
in December that Yahoo wants to “define a standard business
goal like Cost Per Action (CPA), then let the system automatically find the most
cost-effective way to deliver against that goal”. Which sounds very

What about Microsoft and their much vaunted new online advertising platform, AdCenter?
Once again there is little information on this. I’d love to know Don Dodge’s
view on it.

For now, Google looks to be the most advanced of the Big 3 in terms of CPA
/ PPA. So this means that Microsoft and Yahoo will have to scramble (again!) to
catch up with Google in online advertising, or else they’ll need to do some
acquiring. Perhaps all is not lost for the likes of Commission Junction just
yet! What are your thoughts on this?

About ReadWrite’s Editorial Process

The ReadWrite Editorial policy involves closely monitoring the tech industry for major developments, new product launches, AI breakthroughs, video game releases and other newsworthy events. Editors assign relevant stories to staff writers or freelance contributors with expertise in each particular topic area. Before publication, articles go through a rigorous round of editing for accuracy, clarity, and to ensure adherence to ReadWrite's style guidelines.

Get the biggest tech headlines of the day delivered to your inbox

    By signing up, you agree to our Terms and Privacy Policy. Unsubscribe anytime.

    Tech News

    Explore the latest in tech with our Tech News. We cut through the noise for concise, relevant updates, keeping you informed about the rapidly evolving tech landscape with curated content that separates signal from noise.

    In-Depth Tech Stories

    Explore tech impact in In-Depth Stories. Narrative data journalism offers comprehensive analyses, revealing stories behind data. Understand industry trends for a deeper perspective on tech's intricate relationships with society.

    Expert Reviews

    Empower decisions with Expert Reviews, merging industry expertise and insightful analysis. Delve into tech intricacies, get the best deals, and stay ahead with our trustworthy guide to navigating the ever-changing tech market.