Why Cost Per Sale (CPS) Sucks Part I

From an advertising standpoint, the internet is one huge lab. Unfortunately, some of the experiments being conducted have already been tried (and failed) elsewhere. One of these is buying ad space on a "pure performance" or "pay for play basis". Whatever jargon you use, it still boils down to just one thing. If they (the seller) don't sell - you (the publisher) don't get paid.

What's wrong with that? Well, look at the personal pronouns in the preceding paragraph. This isn't a "pure performance" agreement at all. Your payment is based on their performance. A legitimate, "pure performance" agreement is where You get paid based on the things that you can control. With CPS deals, the list of critical elements over which the website publisher has no control is pretty long. 

Fraud: This is the least of your worries. Although it does happen on rare occasions that an advertiser is fraudulent, these are just stupid criminals. This isn't a moral judgment - They're stupid because they waste time and energy on criminal intent - When good, old-fashioned incompetence will do the job just as well.

Incompetence: Where to begin? The product is too expensive, cheaply made, not in demand, so in demand they're back-ordered, badly serviced, requires too much service, can't be serviced because they don't make the parts any more, too big, too small, they don't take master-card, they do but they double-bill you accidentally, Jenny in customer service is having a bad day, Jenny's having a great day with Dave in accounting which is why the phone's not being answered, the computer is down, the computer is up but it deleted all the files, the cat ate the paperwork and it turns out the product gives you cancer.

Multiple Channels to Purchase: Smart companies have more than one way of selling their product. This means that you can buy widgets on the internet, on the telephone, at conveniently located widget stores or as an add-on to your car rental. There's nothing wrong with this, but if one of your ads takes them to a site, and there's a big fat toll free number sitting there...the visitor will do the homework online...and then buy on the phone.

Multiple Paths to Purchase: Even when a company only sells through the internet, you, the publisher, are competing with others to be the last one visitors buy from. It doesn't take rocket science to figure out that "Buy xyz brand widgets through my site and receive a $5> $10>- $15 rebate" is way to scoop business. It's stupid, it's unethical, it's a lousy way to do business and in some cases it's even illegal.

And it happens all the time.

If you want to get into the business of selling widgets - then go nuts and have a good time. But if you are into the business running a website, be aware that a CPS deal is not an advertising contract....it's a part-time job selling widgets.