Google's New PPA Ads Won't Solve the Distribution Fraud Problem

The new PPA advertising (pay per action) option for Google AdWords is a fantastic idea. However, if I'm reading the press release correctly, it won't help with the distribution fraud problem:

Pay-per-action ads are only shown on Google AdSense™ for content sites. AdSense publishers are able to choose whether they want to serve pay-per-action ads on their sites.

Distribution fraud on Google AdWords is due to their AdSense for Domains program. Maybe I'm reading too much into the press release but that sounds different from the "Google AdSense™ for content sites" mentioned in the press release. Plus, since PPA is an option for AdSense publishers, I doubt many would go for it. They'll likely benefit more from CPC or CPM pricing. I wonder how many will sign up for the beta. Sounds like good news for advertisers but bad news for publishers.

There's some great insight into this new program on the SEO Refugee Blog (that's one of my favorite blogs in the search marketing space right now). Interesting, too, that Michael Arrington of TechCrunch (which normally discusses web 2.0 sites) has weighed in on the issue, arguing that:

Affiliate marketing networks like Commission Junction and LinkShare are screwed. These networks also operate on a cost-per-action basis, mostly with online retailers. Even though some of them have scale, they will not have the ability to compete with Google on sheer size of network.

Since we're talking text ads here, I don't necessarily see this as a direct threat. Has Google Checkout killed off Paypal? What is peculiar, though, is the announcement of a new format of text ads in conjunction with the launch of PPA ads:

You can create text ads, image ads, or our new text link ad format in your pay-per-action campaign. Text link ads are brief text descriptions that take on the characteristics of a publisher's page. These Javascript-based ads will display like regular hyperlinks and allow publishers to embed these links inline with other text to promote your product or service.

Hmm, blurring the line between content and ads. Hasn't that always been against Google's corporate philosophy? Note #6:

You can make money without doing evil... Advertising on Google is always clearly identified as a "Sponsored Link." It is a core value for Google that there be no compromising of the integrity of our results... Our users trust Google's objectivity and no short-term gain could ever justify breaching that trust.

Oops, scratch that off the list. Technically, you could argue that this still holds since the new PPA ads (and this new text ad format) will only run on the Google content network. This violation of Google's core philosophy won't exist on Google.com itself.

I think there's going to be some interesting discussion ahead. PPA sounds like a great idea for advertisers, not such a compelling option for publishers, and might be a questionable experience for the end user as the lines between content and advertising become blurred.

Apogee Tags (read why I don't use Technorati tags): ppa advertising, pay per action, ppc ads, pay per click, click fraud, distribution fraud, google adwords, content network, adsense for domains, search marketing, cpc, cpm