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Wednesday, June 21, 2006

Google Testing Pay-Per-Sale AdSense?

David Jackson of SeekingAlpha reports that Google is inviting a selected group of AdSense webmasters to test out new “Cost-Per-Action” (CPA) ads. Quote SeekingAlpha’s reprint of Google’s mail:

How do I get paid?

You get paid whenever a site visitor clicks on the ad on your site AND performs a specified action, such as generating a lead or purchasing a product.

There are mainly three types of ads for websites; pay-per-view, pay-per-click and pay-per-sale (aka affiliate ads). With pay-per-view, the obvious problem is that sneaky websites can abuse the system and find ways to generate massive traffic with semi-hidden ads no one ever clicks on. With pay-per-click, the problem of click fraud, or clicks that never generate sales remains. With pay-per-sale, I could imagine it’s much, much harder to abuse the system; after all, whatever is paid to the webmaster is mostly less than what the advertiser makes from the sale.

But is this the future of advertisement? I mean on TV, what advertisers pay for is exposure and pushing brand recognition – sales are indirect most of the time. And with pay-per-sale, webmasters will get more and more dependent on the target page actually making a relevant and good sales pitch. Or to put it another way: if you have an ad on your blog advertising for XYZ, and someone clicks on XYZ but then doesn’t like what he sees, it’s not really your fault – you leased the space for exposure but you can’t control whether or not the target site is convincing.

Of course, Google will offer you the choice to display cost-per-action ads in the future or not. From their FAQ, as quoted by SeekingAlpha:

Do these compete with regular content ads?

These ads will not compete with contextually targeted ads. Instead, they will show across a separate network, the Content Referral network. To place one of these ads on your site, you can set up a new ad unit that supports any of our current ad unit sizes.


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