Snap Brings ‘CPA’ to Shopping Search
Shopping search is one of the most furiously competitive market segments and Snap is fighting an uphill battle to gain traction (just as in the general Web search space). The consumer differentiator is “coupons and deals.” More interesting to me, however, is the differentiator for advertisers: Cost-per-Action (CPA) billing/pricing.
The CPA model means, according to the company, “that advertisers only pay for qualified buyers, not web surfers.” Although the press release doesn’t explicity say this, that would suggest “conversions” in this context.
With Snap.com, the general search engine, the “action” can be a site registration, a conversion, a verified contact with a business—it depends on the context. In the shopping context, unless retailers are seeking to have shoppers fill out forms, “action” must equate with a sale (though I haven’t verified that with the company).
What’s really interesting about that is that it might suggest a day when PPClick as a model for shopping sites goes away and gives way to a conversion/revenue sharing model. That would be far less lucrative for shopping sites, however. But it’s a smart way for Snap to enter an overcrowded market and try and get some attention from advertisers and merchants.
If Snap’s shopping site fails to get much attention or traction with consumers then what I said above may not soon come to pass. However, ultimately it probably will.
Greg Sterling is managing editor of The Kelsey Group. He also leads The Kelsey Group’s the Interactive Local Media program, focusing on local search. Greg came to The Kelsey Group from TechTV’s “Working the Web,” the first national television show dedicated to e-business and the Internet.