March 20th, 2007

Can Google Transform The Entire Web Into A Direct Marketing Machine?

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As anticipated, Google has launched a “cost-per-action” advertising program that allows advertisers to pay only for specific results, such as a sale, lead, sign-up, etc. Andy Beal thinks this is a threat to online affiliate marketing, and surely it is. But Aaron Wall’s comment jumped out at me:

If they push this as hard as they did AdSense or search it is going to teach advertisers and publishers to create efficient conversion oriented content and sales funnels. It will fundamentally change the structure of the web.

Google’s contextual advertising revolution has already transformed the structure of the web, leading to the creation of millions of web pages with no other real purpose than to serve AdSense ads. The content on these pages is purely a vehicle for advertising — the traditional Chinese Wall between editorial and advertising has been obliterated. And it has force many publishers who follow a more traditional editorial path to start poking holes in the wall. Content has always been a marketing vehicle, but never at such a granular, easy-to-manipulate level.

With its CPA program, Google will drive this phenomenon to the next level. With cost-per-click ads, spammers create bogus pages where confused consumers click on ads in an effort to escape. But with CPA ads, clicking is not enough. The game is now to manipulate consumers not only to click, but to take some further action. And I don’t use the word “manipulate” arbitrarily. This is about turning the web into one big pile of junk mail, aimed at getting you to sign up, buy, or commit to something that you hadn’t necessarily wanted.

Of course, everything exists on a spectrum. Many CPA ads will be placed next to high quality content and lead consumers to offers that they will genuinly find valuable. But that “lighter touch” publishing model isn’t what made Google the cash soaked monster it is. No, Google became big by giving “publishers” (i.e. people with no editorial goals, only profit goals) the tools to turn the web into a giant direct marketing machine.

If you think the web is filled with marketing now, you ain’t seen nothing yet. It will make you long for the days of network TV when you only had to sit through three minutes of commercials.

Google will also increase, by an order of magnitude, the pressure on advertising as a creative art, where it was once acceptable to waste half of a brand’s money. No, Google doesn’t profit from advertising. It profits from direct marketing, where the ends always justify the means.

Comments (44 Responses so far)

  1. Can Google Transform The Entire Web Into A Direct Marketing Machine?

  2. to sell, since it raises the bar about what gets paid for. If the ads have to show direct results, won’t that make spamming or flashy “Click To Win!!” ads less productive? Karp has a more developed view that comes to a different conclusion. Go read it here; for starters, this taste: Of course, everything exists on a spectrum. Many [cost per click] ads will be placed next to high quality content and lead consumers to offers that they will genuinly find valuable. But that “lighter touch” publishing

  3. Una serie di link legati al lancio di google PAY-Per-Action:google Pay-Per-Actioncan google transform the entire web into a direct marketing machine?la notizia del lancio Digital Moleskine: appunti caotici di Sid05

  4. Can Google Transform The Entire Web Into A Direct Marketing Machine? 4 days 2 hours old Can Google Transform The Entire Web Into A Direct Market Machine? 4 days 2 hours old How Much Money Does Google Make From Spam In Its System? 5 days 15 min old

  5. ’ arbitrarily. This is about turning the web into one big pile of junk mail, aimed at getting you to sign up, buy, or commit to something that you hadn’t necessarily wanted.” Scott Karp Publishing 2.0

  6. Original post: Comment on Can Google Transform The Entire Web Into A Direct… by at Google Blog Search: direct marketing Technorati tag: Direct marketing

  7. s AdSense model may reach a tipping point where CPC rates start to drop because the quality publishers are no longer subsidizing the scammers.  This will help make the Internet a better place (To this point I disagree with Scott Karp’s conclusion that Google’s CPA network will create direct response hell online.  It is easy to dupe users into clicking on things, you have to deliver value to them to get them to sign up for a service, order a product, etc.)   

  8. He concludes “…content platform and content aggregation businesses (think Google, YouTube, MySpace, Facebook, Digg) are the only real media businesses left. “Oh well. If Google has its way, maybe the content business can transform itself into a direct marketing business.”While this final line appears to be a bit of a throw away – it is exactly what some media businesses are attempting to do by moving themselves along the supply chain. But – as discussed previously – Google’s cost-per-action model puts even this quite

  9. Official Google announcements: Inside Adwords: Google Pay-Per-Action beta test Inside Adsense: now accepting applications for new referrals beta Blogger commentary: Mike Arrington / TechCrunch Andy Beal / Marketing Pilgrim Scott Karp / Publishing 2.0 Joe / TechDirt Andrew Goodman / Traffick Jeremy Liew / Lightspeed Rob Hof / BusinessWeek Tech Beat Barry Schwartz / Search Engine Land others on TechMeme 1 2 3 4 and my crystal ball from the past year:

  10. Some people claim that Google is out for the best interest of their users, but why the need for cost per action ads that are only labeled as ads on a scroll over? Ads cloaked as content are what is best for users? In a couple years we will see: The game is now to manipulate consumers not only to click, but to take some further action. And I don’t use the word “manipulate” arbitrarily. This is about turning the web into one big pile of junk mail, aimed at getting you to sign up, buy,

  11. neutral13positive18negative5 Overall, I’d say the reaction so far is cautiously positive towards Google. However, there are some sentiments I came across that don’t feel that way, like Publishing 2.0 with Can Google Transform The Entire Web Into A Direct Marketing Machine? “…Google’s contextual advertising revolution has already transformed the structure of the web, leading to the creation of millions of web pages with no other real purpose than to serve AdSense ads.

  12. Scott Krap talking about new Google CPA program which is in beta. Many hypes have be created some think it might kill MFA sites. I have read the Google Pay Per Action Faq which is quite interesting and itself explain drawbacks in their working model.

  13. but to take some further action. And I donÂ’t use the word “manipulate” arbitrarily. This is about turning the web into one big pile of junk mail, aimed at getting you to sign up, buy, or commit to something that you hadnÂ’t necessarily wanted. http://publishing2.com/20…direct-marketing-machine/ posted by mouser [IMG donate to mouser] – March 28, 2007, 05:22:00 PM social bookmark this story (permalink) (read 1 comment) [IMG] [IMG] [IMG] [IMG] [IMG] [IMG] [IMG] [IMG]

  14. Some people claim that Google is out for the best interest of their users, but why the need for cost per action ads that are only labeled as ads on a scroll over? Ads cloaked as content are what is best for users? In a couple years we will see: The game is now to manipulate consumers not only to click, but to take some further action. And I don’t use the word “manipulate” arbitrarily. This is about turning the web into one big pile of junk mail, aimed at getting you to sign up, buy, or

  15. Some people claim that Google is out for the best interest of their users, but why the need for cost per action ads that are only labeled as ads on a scroll over? Ads cloaked as content are what is best for users? In a couple years we will see:

  16. Can Google Transform The Entire Web Into A Direct Marketing Machine? » Publishing 2.0

  17. This doesn’t make sense. Publishers control the content around Adsense ads, and can induce the user to click. Hence, publishers control the click-event and love CPC. Advertisers hate CPC. The CPA-event on the other hand is owned by the advertiser where you land up after the click (the sign-up, purchase etc.). Publishers can no longer monetize “tricked-user” clicks and hence have less motivation to spam.

  18. Shamik,

    The approach to consumer manipulation is indeed very different for CPA than CPC. But affliate marketing is an entire industry that has been built up around “publishers” who drive traffic to sites they don’t always control where they only get paid if someone buys, signs up, etc. What’s new here is Google muscling into the game, and the incredible network effects that Google can bring to bear.

  19. I’m with Shamik. CPA is far more difficult to manipulate. That doesn’t mean I think you’re offbase suggesting there will be a lot more content tailoring going on. But if the advertisers flock towards CPA, it’s going to create some additional work for the link aggregators.

    CPA requires a lot more infrastructure from the advertiser as well (to report conversion.) Is verification done via pixel tracking on the advertiser’s confirmation screen? I obviously need to look into it further.

  20. It will make you long for the days of network TV when you only had to sit through three minutes of commercials.

    You’re wrong – there will be more marketing, but avoiding it will always be an option, just as it is now. If one web entity forces too many advertisements on me, I’ll go where I can get the same content without the ads. And if there’s a need for content with cut down advertising, there will be someone who’s more than willing to provide the service.

  21. Believe me, fraud is still prevalent in the cpa model. They’ll find a way, always do. It will be harder sure, but it will be there.

  22. [...] than draw upon Google’s official source about the beta test or the opinion Google is all about direct marketing, or how it may change the “structure of the web” I am going to focus on the “big picture”. Their [...]

  23. [...] leave nonsense. Health Care, Retirement, Day Care….  Read the whole thing.  Then read Scott Karp, who says,  If you think the web is filled with marketing now, you ain¹t seen nothing yet. It will [...]

  24. I remember there being plenty of spam on the web before Adsense showed up.

    However, I don’t remember there being very many small sites maintained by a full-time publisher who creates high quality niche content. That’s a reality now. Adsense made that possible.

    Also I don’t remember there being very many small shops who were able to compete and get noticed inbetween the big boys online. Adwords made that possible.

  25. Jim, indeed. And, there’s a spectrum that ranges from outright fraud at the extreme to more subtle forms of manipulation.

    Hashim, you’re right that AdSense has definitely been a positive force. I’m focusing more on the (largely) intended consequences of these systems.

  26. There is only one solution: people have to take control of their mindshare. This is the first two paragraphs of my article “Charting the mindshare market”:

    http://blog.mymindshare.com/2007/03/charting_the_mi_1.html

    Mindshare is valuable. Consumers possess it and advertisers pay billions of dollars to get it, but not one dollar changes hands between advertiser and consumer. Instead, mindshare is captured by Media then sold and resold, without a penny of compensation to the owner of mindshare.

    Consumers are excluded from the mindshare marketplace. At best, they are party to an unwritten and un-negotiated contract in which they trade mindshare for ad-supported programming. At worst, consumers are subjected to outright theft as mind and media are polluted with irrelevant, unwanted, unsolicited and uncompensated advertising.

  27. [...] are sounding the alarm bell, however, including Atlantic Media managing director Scott Karp, who in his blog this personal blog this morning writes, “With its CPA [cost-per-action] program, Google will drive this phenomenon to the next level. With [...]

  28. This is about turning the web into one big pile of junk mail, aimed at getting you to sign up, buy, or commit to something that you hadn’t necessarily wanted.

    There’s been tons of direct response marketing online already, most notably after the dot com bust when online ad markets dissappeared. And even those people ae finding that hard-sell manipulation is less effective.

    I think the trend towards relationship/trust marketing will continue, because it’s the only thing that seems to be working. But even trust can’t sell a truly crappy product, or, at least not for long.

    There’s already a million affiliate and CPA programs on the web for people to choose from. I don’t see why Google putting their name on one will change what works and what doesn’t as far as techniques go.

    AdSense was revolutionary, CPA is not at this point. Google is showing up late to the CPA party, and although they’ll make big money, it won’t drastically change anything.

  29. Great post Scott

    >There’s already a million affiliate and CPA programs on the web for people to choose from. I don’t see why Google putting their name on one will change what works and what doesn’t as far as techniques go.

    I think it is the scale and targeting which is the issue. Think of the Google recommended items for you widget…then think of something similar telling you WHAT to recommend, then allowing you to look through how other people are recommending it.

    Everyone becomes a direct marketer.

  30. How dare you suggest that my blog on debt consolidating mesothelioma dentistry has no purpose other than to get people to click on adsense ads!

    On a more serious note, didn’t Amazon pioneer this like 10 years ago with their associates program? CPA advertising isn’t new – Google might spur more people towards using it, but I don’t think the web is going to be any different as a result.

  31. Everyone becomes a direct marketer.

    I’ve been saying that this is inevitable over here for a year. :)

    I guess this does up the scale of how online direct marketing already works. Everyone in DM looks at what works and emulates it; now it’s democratized.

    So, scale is an issue. But WHAT WORKS will remain the same. So I guess the real lament here is that worthless advertising that doesn’t work will disappear–and that’s bad, because the audience prefers advertising that doesn’t work?

    From a publishing standpoint, the most interesting thing to watch is how much we’ll see content become the ad itself. The real manipulation occurs when people don’t realize they are being marketed to, but again, it’s very difficult to successfully sell worthless crap these days, not matter how effective the copy.

  32. How dare you suggest that my blog on debt consolidating mesothelioma dentistry has no purpose other than to get people to click on adsense ads!

    Haha, now that’s funny stuff.

    Brian said…

    But even trust can’t sell a truly crappy product, or, at least not for long.

    Tell that to about a million “info product” marketers who’s sales pages convert way higher than most people think they do, consistently!

  33. Mind you, I do not believe that all “info products” are crap, at all. But many are. However, many aren’t, and are written by good smart people who have good intentions. That’s my disclaimer :O)

  34. [...] Insightful as always, Scott Karp asks on his Publishing 2.0 blog “Can Google Transform The Entire Web Into A Direct Marketing Machine?” [...]

  35. I have some different views about CPA network which i listed at:

    http://www.nutskulls.com/2007/03/22/google-cpa-will-boost-ppc/

    Give it some time to read The Reasons with facts that makes you believe it

  36. Tell that to about a million “info product” marketers who’s sales pages convert way higher than most people think they do, consistently!

    I understand that market very well, Jim. When selling information, the copy is more important than the product. :)

    And yet what I said is still true… it’s getting harder to sell crap consistently when the word spreads as fast as it does now. Plus, successful direct marketers make money by selling more stuff to the same people they’ve already sold to, and therefore need to satisfy the quality demands of the audience to be profitable over time.

    The problem with the Google model (and CPA in general) is that the publisher doesn’t own the relationship, and therefore has less incentive to play nice. That’s why sellers need to become content developers too, and cut out the middleman to a certain degree.

  37. [...] Oh well. If Google has its way, maybe the content business can transform itself into a direct marketing business. [...]

  38. [...] as ads on a scroll over? Ads cloaked as content are what is best for users? In a couple years we will see: The game is now to manipulate consumers not only to click, but to take some further action. And I [...]

  39. [...] Can Google Transform The Entire Web Into A Direct Marketing Machine? [...]

  40. [...] irony here is that Google is running in the completely opposite direction with its cost-per-action advertising program, which provides the ultimate feedback [...]

  41. [...] In other words, brand advertisers will pay more not to be raked over the coals of hard ROI. And this isn’t necessarily a bad thing — while a lot advertising is probably still wasted, a media and marketing world driven entirely by Google’s hyper-efficiency would not necessarily be an attractive place. [...]

  42. [...] In other words, brand advertisers will pay more not to be raked over the coals of hard ROI. And this isn’t necessarily a bad thing — while a lot advertising is probably still wasted, a media and marketing world driven entirely by Google’s hyper-efficiency would not necessarily be an attractive place. [...]

  43. [...] to end up as a big, happy direct marketing machine? Is this what everyone wants from the Internet? Scott Karp has his doubts when he watches Google move towards monetizing social media through a “cost [...]

  44. [...] Can Google Transform The Entire Web Into A Direct Marketing Machine? [...]

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