Who’s Really Winning If CPA Programs Rule?

“Marketer’s Note” is a weekly column informing marketers about the rapidly evolving, digital marketing technology ecosystem. It is written by Joanna O’Connell, Director of Research, AdExchanger Research.  

I was inspired by this week’s AdExchanger comic, which features “Mr. CPA” on the top of the mythic Mr. Universe winner’s podium, to comment on the market’s continued obsession with CPC and CPA programs.

When I was a media planner and buyer back in the mid-2000’s, and I had a very aggressive direct response client who demanded high volumes of sign-ups and high expenditures of budget, I found myself laying down vast amounts of money to dozens of ad networks at a time to meet my client’s requirements. CPM, CPC, and CPA programs were all in the mix. I really had no idea what was being done behind the scenes, I just knew that I was meeting my client’s goals. Of course, when they asked me why something was working, or, why all of a sudden something wasn’t working, I had no idea.  I had no visibility and no control.  Who knows, maybe one of my CPA partners turned remarketing back on to up their performance, even though I’d told them not to, or one of the ops guys managing my campaign went on vacation and left no one at the helm of my program, leaving it to tank.  Frustrating, yes, but this is what was available to the buying community at the time.

Today, we the buyers have platforms that allow us to accomplish many of the same things, without necessitating the use of CPC and CPA programs. We can access wide swaths of inventory – through both open exchanges and direct publisher deals – point our technologies to optimize toward specific campaign goals, and make as many real time changes as are warranted, all with an eye toward driving meaningful conversions which are being carefully tracked using an advanced attribution system. (Yes, I said it!  Down with last click!) In fact, ideally that post-attributed data is then being pushed right back into the buying platform to create a closed feedback loop of buying, optimization and performance assessment.

Tangentially, but related, while at a conference entirely dedicated to the fraud problem not too long ago, a group of panelists got into a heated discussion about who’s really responsible for fraud – “It’s the exchanges!” “It’s the networks!” “It’s the agencies!” “It’s all of us!” – and the point was raised that if agencies weren’t desperate to spend every cent hitting clients’ CPC goals they’d be far less likely to buy bad inventory (where faking clicks is awfully easy).  I immediately thought to myself, wait, there are still marketers out there optimizing to CPC? Why don’t they pick an optimization target that actually matters to their business, like incremental sales volume, increased ROAS, improved recall or purchase intent (proxies, yes, I know, but still better than CPC).  I was shocked. I left feeling like it was still 2005.

I’ll concede that there may be specific instances where such programs are warranted – note I used the phrase “many of the same things” above – maybe there’s inventory a specific partner has locked up that can’t be found elsewhere, for instance. But I fundamentally believe that reliance on CPC and CPA programs as the primary go-to-market media strategy isn’t good enough anymore, and puts marketers at risk of falling behind their competition – who ARE embracing a more hands on approach to media management – in the long term.

There, I said it.  I eagerly await the firestorm of angry comments in response!

Joanna