Trezr & The PPA Advantage

“Trezr aggregates online deals, coupons, and money-saving tips from around the web.  It is entirely user-driven and boasts an impressive feature set…”

So Trezr would be just another social shopping site with its anemic traffic and cookie cutter web 2.0 design, except its 1) for sale on eBay and 2) brilliantly monetized.  Setting aside the valuation exercise for a rainy day, let’s look at the business model.  The startup team whipped up a nifty trick: automatically splicing affiliate network code into user-submitted links. 

That’s an interesting twist because most social networks run on display-type placements and leave affiliate marketing to the shopping aggregators like NexTag.  It’s also a glimpse of ad tech in development that will monetize UGC in all its mashable viralicious forms… brand planners be warned.  To wit, TechCrunch had a great run-down of video ad startups today.But where are the UGC video affiliates? 

Is there something unsexy about affiliate advertising, i.e. when a publisher only gets paid when an ad generates a sale?  Sure.  From the publisher’s POV, it preempts all the opportunity of approximating the ROI of CPMs.  But for an advertiser, affiliate networks are the ultimate in accountability. 

Google knows this.  That’s why they’re soooooo late to the party with their PPA model.  Go PPA and *poof* bye, bye click fraud.  But so also goes incremental rev from click fraud and, perhaps more significantly, from “fuzzy” math. 

What I mean is that a lot of PPCer’s overpay, especially the less sophisticated ones.   This happens when conversion rate variance distorts the true value of a lead, driving up bids.  With PPA, the conversion inference is taken out of the equation so acquisition costs are easier to control. 

And PPA is not just for eCommerce.  Even a media site should have measurable actions which serve as a yardstick for traffic acquisition tactics like PPA/PPC.  

Yet, don’t expect Google to implement PPA soon.  Even if advertisers recognize PPA superiority, they would still bow to the search giant’s reach with consumers.   Ad revenue follows traffic like a fly fisherman on the Beaverkill.  That’s why great hope for PPA is social media, the only credible threat to search.