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BizReport : Advertising archives : March 21, 2007

Actions speak louder than clicks, new Google ad pricing model

Google is testing a new ad pricing model which will allow marketers to specify which consumer actions they wish to pay for, giving advertisers more control over their campaigns and creative.

by Helen Leggatt

Google is to test ads that track visitor actions once they’ve clicked through to a site, report Traffick. Advertisers will be charged based on an action the visitor performs such as registering for a newsletter, downloading documents/software or purchases. The tests will be done on its network of AdSense publishers.

"While there will likely be fewer "actions", the revenue realized per event will probably be greater--and much greater in some cases," said Greg Sterling, principal for Sterling Marketing Intelligence.

At present Google offers cost-per-click and cost-per-impression, with the majority of ads still priced on the original cost-per-click model. The addition of cost-per-action will give marketers more control over their campaigns and the two-stage action could go some way to preventing click fraud.

Is this new development a sign of Google dipping its toes into affiliate marketing? Should the likes of Commission Junction and ClickBank be worried? Afterall, the ad pricing model sounds very much like that which has been used by affiliate marketing for quite some time.

Tags: ad pricing model, AdSense, affiliate marketing, cost-per-action, cost-per-click, cost-per-impression, Google

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  • It's interesting to see Google get into the CPA ad model, but I don't foresee Google giving up their PPC cash cow for this. If it works out (remember this is currently a test for them), it will probably just become another advertising option--much like the CPM/site specific ads are right now.

    It actually makes sense for Google to move to this model for their Adsense content network. They won't make as much as they do now, but fraudsters won't be able to fake actual transactions nearly as easily as they can fake clicks. It will be a better value for advertisers, who will continue to spend more on their Google ads because the ROI is there.



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