Google's Pay-Per-Action Announcement

Greetings search enthusiasts. Big news from Google - theyve launched the beta version for their new pay-per-action advertising pricing model. Its being tested in US-markets only and is available through the existing AdSense network. The implication here is that Google would be open to a significant change in business plan should this pay-per-action be a resounding success.

Googles pay-per-action (or 'CPA' cost-per-action) appeals most directly to the advertiser, traditionally the bearer of click frauds brunt. CPA provides Googles advertisers with the option to assume greater control over advertising budgets through a sense of advertising accountability. Advertisers can predetermine what action end users must satisfy in order for them to make good on payments to the publisher network. This is in stark contrast to the traditional cost-per-click model thats made Google into the behemoth we know it as today.

Many are praising Google on this, and perhaps this beta test is a direction Google felt compelled to explore at some point. Existing faith in Googles main revenue source has matured somewhat. In 2005, 35% of pay-per-click advertisers indicated an increase in the amount of pay-per-click budget; this number went to 49% in 2006. This suggests several things: to start that pay-per-click may be growing less effective as web users become more web-savvy, secondly that the gross number of PPC advertising may be leveling off, and lastly that now is the time to explore other forms of search advertising.

While its not difficult to discern the 'why' of Googles pay-per-action initiative, the latter should be especially noted as a distinct departure from business as usual for the Mountain View, CA search engine. For the first time Google is addressing a major concern of the advertiser regarding the sometimes unreliable click. Grumbles over advertising risk with tough-to-track clicks have rarely been addressed; and even when they have been, its only been in a cursory manner.

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