Indeed Adopts PPA/CPA Model

Meta-search jobs site Indeed.com has introduced a CPA/PPA model (akin to lead gen here) where advertisers pay only for qualified “actions” (here job applications or contacts). Indeed is seeking advertiser attention and this sort of innovation is much less likely to come from category leaders such as CareerBuilder, Monster or HotJobs.

Putting aside affiliate networks and lead gen, search engine SNAP was the first (in my memory) to introduce this model as an alternative to PPC on a mainstream consumer site. Subsequently others, including shopping site Jellyfish, have done so. Google also recently introduced CPA.

There’s an argument here that CPA/PPA will only gain momentum; however that’s not necessarily so. Borrell Associates, in its recent report on the Automotive vertical indicated that lead gen programs were losing favor. And Jellyfish triumphantly proclaimed that their model was game-changing and would initiate a “major shift” in online advertising when it launched. It has not.

That said, I still think that CPA may bring valuable innovation to certain areas. Accordingly, here’s my recent related post on CPA and local.

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4 Responses to “Indeed Adopts PPA/CPA Model”

  1. Bronte Media » The asterisk of performance-based media Says:

    [...] why a CPA model – in my mind – doesn’t work. Greg Sterling reports on Indeed, a job search engine, moving to a CPA model, and is a little skeptical and a little positive [...]

  2. Malcolm Lewis Says:

    In our experience CPA is great for advertisers but the economics (all-or-nothing payout with typically nominal conversion) are often decidedly inferior (to CPC) for publishers. I suspect CPA will have limited momentum until CPA fees improve and/or advertisers design better landing pages that improve conversion to the desired action.

  3. Mark McGuire Says:

    I disagree with your assessment on Greg. The shift to more accountable forms of advertising is happening and I think it will continue over the next several years. For example, we’ve had a tremendous response from our retailer partners, many of which are thrilled to have a risk free channel without click fraud. CPA isn’t perfect for every advertising need (e.g., brand awareness), but I continue to believe that the shift to CPA will continue over the next several years. I think Google’s move in that direction is a major validation of that belief.

  4. Greg Sterling Says:

    CPA, CPM and CPC/PPC will all co-exist. Yes, businesses/retailers would prefer CPA models because of the distribution of risk. Publishers don’t like CPA generally for that same reason — they bear the risk. It’s a disruptive model new competitors (e.g., Jellyfish) can use to enter mature markets (e.g., online shopping). It’s a model that may ultimately be well suited to the local market. I don’t, however, think CPA is going to take over.

    Snap touted CPA and made a bunch of predictions about how click fraud would drive adoption of its engine. Snap didn’t have any traffic and wasn’t able to attract advertisers as a consequence.

    If Google, Yahoo or MSFT were to abandon PPC and move much more broadly to CPA (which Google could easily do in Shopping w/o undermining its search PPC model), then I would be more inclined to agree. Short of that, however, any large-scale move to CPA models will take a long time.

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