Google Pay Per Action Changes Web Advertising

Google announced the release of its pay-per-action advertising pricing model which allows advertisers to pay for completed actions (not just clicks [CPC] or impressions [CPM]. Advertisers will need to define an action, set up conversion tracking and create ads that will motivate publishers in the Google content network to place ad units on their site. Everyone ( or at least everyone I'm reading) seems to be talking about this and for good reason; it could change the advertising and marketing landscape for a long time to come. As you might guess, affiliate networks like Commission Junction and others across the Web are pulling their virtual hair out.

Google has obviously thought about pay-per-action a great deal and it shows. I blogged about the possiblity of this in the past but I expected a program of this nature to be tied directly to Google Base, which it may in the future as that offering enables its user/listers to advertise their products directly through Adwords during setup.

Some interesting aspects on the pay-per-action program of note:
  • Ad placement for the pay-per-action model is only on the content side (Adsense) of the network, which means that those advertisers concerned with the quality of the publisher network will be offered an alternative. Can you say "so long click-fraud?"
  • Pricing is advertiser-centric in that it is set by those that are paying for the lead, impression or sale, and not by 1) what you are willing to spend for a visit alone, 2) the quality of your site as determined by Google, or 3) the demand or lack of demand from Adsense publishers or users.
  • Tracking is imperative in a pay-per-action model and Google knows it. While the conspiracy theorists amoung us will worry endlessly about handing over conversion data to Google, others will realize that it's a pretty fair trade in the long run for less expensive completed actions on a site.
The Pay-Per-Action offering is only in beta-test and open only to US advertisers that have or are able to impliment conversion tracking code on their websites. You can learn more and sign up here.