Google launches pay-per-action AdWords

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Google Inc. announced today that it is opening up its four-month old beta program of pay-per-action advertising to a worldwide audience.

The pay-per-action opportunity, which launched originally in March, allows advertisers to pay based on the completion of specific actions taken by the consumer, such as making a purchase or signing up for an online newsletter.

"We really wanted to find ways of adding value for advertisers and publishers," said Rob Kniaz, product manager for pay-per-action at Google, Mountain View, CA. "This program gives advertisers additional conversions and additional inventory to get those conversions."

Starting today, advertisers using Google's AdWords can create pay-per-action campaigns. Advertisers who have received more than 500 conversions in the past month on AdWords will be added to the beta on a rotating basis.

Publishers have the opportunity to select pay-per-action ads on an individual basis, as a shopping cart of ads or by keyword. Only publisher sites in the Google content network show pay-per-action ads.

Google is offering the pay-per-action model for its AdWords clients. AdWords is the advertisers' end of the Google site and is complimented by AdSense, which caters to site publishers.

Previously, Google used cost-per-click- and cost-per-thousand-based pricing models. Mr. Kniaz said that cost-per-click has historically worked very well for advertisers and publishers, and he sees the pay-per-action model as more of a complement than a replacement for the old system.

Google touts the pay-per-action model as a way for publishers to be more precise in their ad placements and effectively use their advertising budgets on more content.

Other sites, such as Amazon.com have used pay-per-action in the past, but this is Google's first foray into the program.

"It makes logical sense to extend our platform in this way," Mr. Kniaz said. "Advertisers are insatiable for conversions. They want to get as many as possible at their target ROI, and they love the accountability that pay-per-action offers."

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