Only Paying When You Receive: Google’s Pay-Per-Action

Google is testing a new ad system, called pay-per-action. Unlike their currend AdWords system, in which advertisers pay for each time a user clicks on their ad, pay-per-action is described this way:

“Pay-per-action advertising is a new pricing model that allows you to pay only for completed actions that you define, such as a lead, a sale, or a pageview, after a user has clicked on your ad on a publisher’s site.”

One of the reasons that pay-per-action is getting so much attention is that it would eliminate click fraud.

Michael Arrington explains what Pay-per-action means to businesses and to Google itself. Among his observations:

“This won’t affect big advertisers much, because they already track ROI on CPC advertising very closely. For smaller advertisers though, click fraud can wreak havoc. The ability to largely filter out click fraud will help them track ROI much more closely that they previously could. This will be a big help for them.”

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