Lately we have been seeing publishers and ad networks getting more worried with more and more traditional digital media advertisers like naukri.com, makemytrip.com etc moving towards CPA model forcing publishers and media agencies executing the plan to get paid when they provide returns on advertising revenue spend.
Lot of bloggers and publishers have talked against this model and especially in India where many publisher sales teams are still gunning for fixed slot and CPM deals not accepting even PPC campaigns makes it even harder to make learn the small publishers why they need to start taking risks to earn bigger revenues.
This lead to evolution of ad networks which are brokers which tend to hedge risk between advertising models preferred by advertisers and publishers.This is done by use of various technologies which slice and dice inventory offered by publishers identifying the best audience for advertisers where they can get conversions in return increasing value for both advertisers and publishers. In India apart from DGM and Komli to just a small extent, none have been really successful on delivering effectively for industry to move towards CPA model.
I would not blame the publisher or ad networks but mainly the advertiser lot available. In india advertisers which are moving towards CPA model are the ones facing situation of extreme saturation. Why for CPA model to exist successfully publisher and there site audiences need lot of variety in terms of ad options etc. Lets look at category of advertisers pushing for CPA Model
* Real Estate sites – magicbricks, 99acres.com
* Matrimonial sites – bharatmatrimony.com, jeevansathi.com, shaadi.com
* Job Boards - naukri.com, monster.com, timesjob.com
* Travel Sites – Makemytrip.com, Yatra.com, TravelGuru.com
If you take any of the categories above mentioned there is no product differentiator or sheer difference in features which would also duplicates to their advertising campaigns. Second biggest problem being faced is most of these players have been in market for some time and casual surfers on internet where they are advertising is more likely to already know the brand and would have registered for their services(ex submitted resume on naukri or monster) further reducing chances of RoI. Though lot of people may argue that there are so many people coming online every month hence their is still scale which web advertising can provide to such advertisers. It is surely wrong to comment on the same. I believe conversion cost against the scale available to naukri or monster will be much higher on web display properties as compared to offline branding properties. For these kind of sites inventory created through other new avenues like cyber cafes or through university exam results site would yeild much higher return. But again going back to the cause of publishers. For them to perform better in this category if they get advertiser like timesjob.com there is still chance of them getting lower conversion cost from display ad as compared to naukri or monster if they dont go for specific behavior targeting.
So how does the above statement help ??
For publishers to flourish and provide scale on CPA or CPL model for advertisers they need lot of advertisers with variety and availability of freshness. In india lot of agencies feel this is a newer model being tried out by advertisers but people are forgeting affiliate marketing has been a very old concept on internet with businesses like amazon, freebee and commission junction have flourished. But the main reason for them to flourish or for the model to flourish was availability of more than 500+ ecommerce ventures in US ready to fight out to grow the market and trying hard to reach out to audiences offering some thing different. Why is Google Ad words flourishing today is due to the fact small businesses are trying to reach out to the larger internet audience giving variety of option to users.
I think so digital media agencies need to teach their clients more about nuances also involved with the model rather than just talking pros of saving money. As in short term its returning them and their clients benefits but in long term its hurting the digital media industry overall.
I would also advice smaller publishers to become more about the CPA model and its advantages but they should carefully sit down and identify the right affiliate program they join otherwise they will end up loosing on precious money they could have just earned running low CPM campaigns from any ad network.