Google's bubble may be about to burst. Though search engines continue to make a tidy sum selling clicks, the advertisers buying those clicks have no choice but to gamble: Only a small portion of online ad click-throughs result in sales and about 14% of clicks on average aim to defraud the advertiser.
On Monday, shopping search engine Jellyfish.com will begin woo advertisers with what it claims is a better mousetrap: It will offer an alternative to cost-per-click (CPC) advertising by opening an online marketplace for advertisers to bid directly to customers for their attention and patronage. The company, which closed initial seed funding from undisclosed investors earlier this year, plans to give the customer half the ad revenue it collects from the advertiser upon making a sale.
The result is that Jellyfish users can get products for less because half the marketing dollars spent by advertisers go directly their customers instead of to a third party. At the time of this article, the cash returned can result in discounts of up to 24%, according to the company. This number will rise and fall daily as merchants bid for consumers' business.
Users can collect their cash once products can no longer be returned, in order to prevent abuse of the system.
The name "Jellyfish," says president Mark McGuire, reflects the company's intent to bring transparency to the ad market.
Google's recent actions suggest that it's aware of the problems posed by the CPC model: Google recently acknowledged that it is testing cost-per-action ads (CPA).
