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Ask HN: Why would you ever choose pay per click for advertising?

7 points by the_cat_kittles ↗ HN
Given the difficulty of differentiating between real and bot traffic, why, as the person paying, would you choose pay per click vs pay per sale, or pay per sign up or pay per <actual goal>? I am not well versed in internet advertising, but from what I've recently read on here, it seems like pay-per-click is terrible.

3 comments

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Ataraxy
While fraudulent traffic is a very real and annoying issue, it's largely irrelevant when you're optimizing campaigns based on things such as ROI or conversion rates. If the traffic source does not pan out you either attempt to figure out why and fix it or simply move on to another.

In this sense, while you may be paying for the traffic on a click by click basis, you're still effectively buying it based on achieving your goals.

Additionally, buying PPC traffic is far more accessible then attempting to get things done on a pay per sign up basis.

AznHisoka
Not everyone has a product to sell. Some people are affiliates or make money through ads.In which case, PPC is a form of arbitrage for them. Others have an offline product, and only run ads to increase brand awareness of that product. So pay per actions makes little sense, since they can't track them.

There are also some niches where there's more ROI in PPC.

calbear81
Almost all advertising systems/platforms today self-optimize when you are bidding against other advertisers vying for limited ad space. It doesn't matter how you bid because at the end of the day there is an expected revenue per impression (or per thousand like an RPM) that is used to determine how much exposure you get.

For example:

CPC - You bid $1 per click to a sign up page for more information on your product. You get a conversion rate of 10% so after spending $10, you get one sign up and the CPA cost of that lead was $10.

CPA - You bid $5 per lead on the same system and observe the same conversion metrics. Now assuming the clickthrough rate was the same on that ad network, they only made $5 after the same number of impressions shown vs. the CPC model. The effective CPC they made from sending over 10 clicks was $.50 instead of a dollar.

The ad platform will eventually optimize itself to give you a lower share of impressions if you bid the $5 CPA because it can normalize expected revenue/returns regardless of bidding models. This is why with a lot of CPA deals, they require a test period to suss out the economic viability of your bid before they will commit to delivering a large amount of impressions on a CPA model on your behalf.