Clickfraud and CPA vs CPM/CPC
Time goes but click fraud continues to exist in digital marketing and seems doesn’t want to go away. Despite Google’s settlement growth this year the issue still continues to rumble on. One of the big advantages of CPC model (cost per click) when it started to replace CPM one (cost per thousand eyeballs) was that the click was supposed to evidence genuine interest. Unfortunately as a result it also opened up a lot of possibilities for fraud. When it comes for value per eyeball and we can see that it is quite low so fraud is a waste of time. But when the price of popular keywords reaches 10 dollars there is enough cash to fund a bit of organized crime.
As a result there appeared CPA model (cost per acquisition) and seemed it was the answer to the growing fraud in CPC. This way the company pays only when the customer has made some action, namely acquired product. It’s difficult to fake, so should be no fraud. And we can see that there was a great increase in demand for such model in recent years, however as showed this year the rise in CPA has flattened out. What is the reason? Fraud again?
The reason is that almost all advertisers of different scales are usually indifferent which model to choose, they all track the downstream metrics. Let’s consider an example, company is paying a CPM rate of 1 dollar per thousand where one visitor per thousand clicks through and makes a purchase is actually equivalent to a CPA rate of the same 1 dollar. The terms can be calculated from each other and they are interchangeable. As a result the industry has chosen CPM to make life more simple.
Most likely the trend will continue to exist as for advertisers is important to know how much a customer is worth for them and whiteout worrying they can still use either CPM/CPA or CPC, they care and analyze only conversion rates that comes when click went to purchase. So as long as their CPA (cost per acquisition) is less than they think a customer should worth they won’t worry too much about how much click fraud exists. However in the long run all advertisers tend to drift towards networks with less click fraud anyway, as they will be more efficient and give a lower CPM/CPC/CPA rate.
In conclusion we can say that the good part of digital marketing is still that it is all measurable and trackable. If advertisers take care of permanent analysis, everything should go well and click fraud should in the long run disappear. However turning back to the distinction between CPM/CPC and CPA model which is mainly based on measurability, at least for the larger campaigns it still remains to consider and compare. While where the volume isn’t big enough the law of averages kicks isn’t big as well, so for such companies the demand for CPA can continue to rise without additional analyzing.
If you still consider which model to choose, don’t hesitate to contact us and we will tell you much more about this and help with the choice.
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