Scott Bourne, author of the PodcastingTricks.com blog, had this to say about PPA recently:
This allows advertisers to define an expected result such as a user downloading a demo version of software or buying a book. When that action takes place (and only when that action takes place) the publisher of the ad gets paid.
Hereâ€™s the problem with PPA and other recent advertising schemes aimed at requiring online media advertising sellers to perform at levels over and above their competition. . . It isnâ€™t fair!
Letâ€™s say you run an ad for Visa. The action they are willing to pay for is applying for a credit card online. As the publisher, you only get paid if that transaction takes place as described. For instance, if your audience sees/hears the ad and takes action somewhere else (by calling an 800-number or applying for a Visa card at their bank) you donâ€™t get paid.
So while the advertiser gets exposure, gets to extend or re-inforce their brand, gets to educate their prospects, you ONLY get paid if the transaction happens immediately at your site.
Here's where I think Scott's conclusion doesn't work for me. Advertisers are willing - at least the ones with foresight - to pay more for performance, particularly in highly competitive verticals. The further down the funnel a PPA program can go, the more the advertiser will pay, because you're offloading risk to your content producers.
As an example, I work at the Student Loan Network, and we have both an affiliate program (which is essentially PPA) and Adwords campaigns. We pay up a fair amount per click via Adwords, but because of constant abuses on the content network, weâ€™ve restricted our spend to the search network only, meaning that podcasters earn NO money from us whatsoever.
Conversely, for every returned student loan consolidation application we get from you as an affiliate, we pay $100. Given that most podcast web sites donâ€™t drive huge volumes of traffic (thereby making CPM and PPC worthwhile), running media-style impression campaigns still wonâ€™t pay off.
PPA/Sponsorship/Affiliate programs stand, in my view, to be the best bang for the buck for podcasters because podcasters have a close relationship with their audiences - closer than, say, an advertiser in the NY Times or on FOX. If youâ€™ve earned your audienceâ€™s trust, when you tell them to check out product X on your web site, you should see high conversion, and with PPA, that means the potential for some serious revenue.
Are you reinforcing the advertiser's brand with PPA? Yes - but no more so than with CPM or PPC advertising models. At least with PPA, chances are the payouts will be higher - and if you can't motivate your audiences to support your show via the advertising channel you've selected, then it's more an indicator that you need to boost your persuasion power with your audience than a flaw in the advertising model.
But I may be wrong, too.