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This week, I met with Dave Morgan, who is the CEO and founder of TACODA, a company that develops technologies for online advertising. In fact, he is one of the pioneers of the online advertising business – as he was the founder of Real Media, which is now 24/7 Real Media
He made the interesting point that Google is really just an electronic yellow pages business. However, it is an extremely scalable one.
It also has a great business model. That is, an advertiser only pays if a user clicks on a text ad. This is known as cost-per-click (CPC).
However, this is not necessarily the best approach. What if a user clicks an ad but does not buy anything?
So, now Google is experimenting with another model: cost-per-action (CPA).
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