Google has officially announced that it is testing a new ‘Pay-Per-Action’ ad model, which looks to be a move into affiliate marketing for the online ad giant.
Under the new ad pricing model, advertisers will decide what kind of action they will pay for, whether it is a sign up for a newsletter, a sale, or some over kind of conversion.
The advertiser can put a price on that action that publishers will be paid. Google will then monitor the conversions through conversion tracking codes on the advertiser’s site.
Although this new pay-per-action model shifts more risk to publishers, as they only receive payment when a customer converts in some way, they should receive a bigger pay off, when compared with CPC.
Currently, Google is not allowing a percentage based pricing scheme. Advertisers can only set a flat price prior to building out the ad. In addition, advertisers can select from a text ad, static image ad, and flash ad.
Google is adding a new type of ad unit, a hyperlink text link and currently the video ad option is not available for pay per action ads. All the ad units will show “ads by Google” with the exception of the the hyperlink unit. The hyperlink unit will only show “ads by Google” when you hover over the link.