It also means we have time to really look at each ad to make sure it's a fit for the audience or if there are ways to make it better.

But these aren't that much of a problem in practice, really. See how affiliate marketing works: it's CPA for all intents and purpose masquerading under a different name. The biggest difference might be that the vendor will contact you, rather than make some kind of bid, if he thinks you've the right kind of traffic.

If your audience is interested in a particular product, you quickly discover it through common sense and trial and error, as you can normally see the click-through rates.

Also, a big ticket item with a low conversion rate sometimes earns better than a smaller one with a high conversion rate. As such, maxing out your ROI is really a matter of seeing what contributes to your bottomline.

The big money is in brands. P&G goes on a 6-month blitz making sure every man knows about the fusion razor, and the person that cleans the house knows what a swiffer is. They use an ad blitz to secure shelf space and consumer interest, then print money hand over fist for the next decade.

As a CPA buyer, I personally welcome rampant ad fraud because it keeps the people with real money like P&G from bidding up ad prices. Ad fraud screws brands and publishers. It helps CPA advertisers, because it keeps the brand money out of the system.

It all comes down to risk tolerance for both parties involved. On one end of the spectrum, CPM models put ALL of the risk onto the advertiser, and CPA is at the other, putting ALL of the risk onto the publisher. CPC falls in the middle.

Depending on who has more leverage in the negotiation, what is possible for one advertiser may not be possible for another. But given the low-quality traffic I've seen on some publishers, and specific instances where I know publishers were arbitraging $.01 CPC clicks into their inventory counts, I'm not at ALL surprised they are clinging to CPM as long as they can. Their very existence depends on it.

High-quality publishers have little problem going with CPA in cases where they can control more of the funnel (which is often the weak link), and they can command a much higher spread as a result.

further, it's not clear what an action would be for a brand campaign

finally, you can demonstrate, eg by geo-fencing, that display ads work, even if many or most of them don't lead to attributable conversions

That said, I'd be careful painting all agencies under the same brush. There are plenty of CPA/performance-based agencies out there now, plenty that are flat fee-based, and every shade of gray inbetween.

Ultimately, ad agencies are incentivized to retain their clients, and if they have performance-based clients, just spending their money with nothing to show will not keep them in business very long. Likewise, people assume most brand advertisers at big companies are stupid. First off, you can't be a "big brand advertiser" without a "big brand" which means "a ton of cash." This also means they have fairly savvy and advanced statistical methodologies and research groups in place to help measure overall lift. Marketing mix modeling (MMM) is their lifeblood. Sure some of them have idiots working there, but at a certain point you have to look at the data at a higher level because you simply can't track everything you do in an accurate manner. Doesn't mean there isn't a way to observe lift and attribute it.

This assumes that ad networks with useful returns offer such an option.

I have no idea what Facebook have been playing at over the last month or so, but I do know that the new system seemed to charge us about 4-5x as much per real visitor to our site as the old one, despite having what appears to be the closest equivalent set up for click-based charging in the two systems. Of course, even that is only Facebook's idea of clicks, which includes non-conversion clicks such as people liking your ad itself or your page, not just the conversions you actually care about.

We pulled all Facebook advertising within a couple of days as a direct result of this and asked them what was going on. They claimed nothing had changed, and I'm told they suggested the dramatic difference was just down to "increased competition". Our theory is that a lot of other small/niche advertisers were also confused by the new model, but many didn't realise what was going on and continued running their own campaigns at the vastly higher cost per click, at least initially.