Is Advertising Going Pay-Per-Action?
Posted Aug 22 in Tyler Arnold
While browsing Inc’s Top 10 Companies by Revenue Growth, something caught my eye while reading about spots five and nine. Not only did they have the biggest rightfully earned smiles, but they both were in the pay-per-action advertising business.
Companies IntegraClick and MediaPost, which saw 12,654.4% and 9,481.1% growth over the last year respectively, both offer similar cost-per-action advertising platforms used by advertisers to measure the effectiveness of their ads. Could we be in the middle of a shift in the way advertising dollars are spent?
Think about it – how much of business is just in a website anymore? Many content creators, bloggers, and website owners promote themselves and their brands across other sites like Twitter, Facebook, and LinkedIn. Why not try to cash in their clout by offering affiliate-style advertising solutions that benefit them across their multiple platforms of promotion?
The whole point of both IntegraClick and MediaPost is that they’re seeing quadruple+ digit growth. Numbers that dramatic usually signal a shift in the market, possibly brought on by a recession that encouraged businesses to switch to spending methods where they can better track their return on investment.
In my dealings with my company, SnobbySlice, I’ve found content creators more than willing to enter one-on-one negotiations about partnerships or other creative advertising solutions. There’s no doubt that bloggers are looking for more ways to make more money to support their site, but the question is how long can these one-on-one partnerships sustain themselves?
Affiliates and partnerships now aren’t to different from advertising just a few years back. Before the easy buy/display ad systems of Google, Yahoo, and Microsoft, billions of dollars worth of ads where distributed site by site and advertiser by advertiser. With the advent of Google AdWords and AdSense, the web saw a birth of a new dominant startup that was able to profit billions just by taking a small percent of every transaction.
Yet, the market is still growing. The text and display ad systems of Google left out the creative blogging world seeking a more effective system better tailored to their needs. Thanks to BuySellAds.com, a business that has seen incredible growth over the past year, upscale content providers were able to find a system that met their basic needs. What about their success? Taking 20% of every ad dollar spent, BuySellAds has seen exponential revenue growth since its relatively recent birth.
When will we see this happen again? I believe it’s only a matter of time before a cleverly designed system grants advertisers a hassle free solution for landing Pay-Per-Performance advertising that replaces people and firms with a single integrated solution. Who could be in charge? It’s difficult to predict. Perhaps publishers will take the upper hand by selecting advertisers that offer them the best deals instead of the other way around.
Is Pay-Per-Action advertising the way of the future? Is it only a matter of time before Google integrates such a system into their existing software?
Comment with your thoughts below.
Allan Says:
Posted August 26th, 2009 at 5:26 am
Great article Tyler. Great things are in store for you.