Yesterday in a press release Google announced the launch of a beta program to begin testing a new pricing model based not on clicks, but on conversions. The “Pay-Per-Action” model allows advertisers the ability to set up specific actions (or conversions) along with how much they are willing to pay for that action.
The new ads are for Google AdSense for content sites. AdSense publishers can decide if they want to participate in the program or not. Participants will be able to review details of the advertisements which will appear on their site and decide if the ads are appropriate for their site or not.
One would assume that the amount paid for an actual conversion will be far higher than what one gets for a click under the current PPC model-especially as the amount will be able to be determined by the Advertiser, setting up a affiliate-like relationship, brokered by Google.
The program introduces new challenges for those managing a web site with the ads. With PPC, the user had little control over what went on their site and only had to rely on ad copy driving a click. Now, they’ll have to consider if the web site the user will visit as a result of a click has the potential of closing the deal.
Update: Google’s Inside AdWords blog has a post specifically about the Pay-Per-Action beta.
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