Somewhat old news now, but interesting none the less to see Google test Pay Per Action Ads with a CPA model. Much like an affiliate program, Google are looking for publishers through Adsense and merchants through Adwords for this initial US only beta. Merchants offer a set price for a desired action and only pay the publisher when the action is complete.
The new Pay Per Action adverts will only be offered to a very limited number of publishers who are part of Googles content network. At the same time Google are offering a new advert type in the form of a text link. The ‘text link format’ looks like a normal hyperlink, but is rendered by script and displays ‘ads by Google’ when a mouse hovers over.
You can read more about the product in the Pay Per Action FAQ.
So Why The Pay Per Action Model?
Google have been wanting to claim a share of the affiliate market for some time & with Adsense they already have a huge publisher list. Offering CPA based pricing will bring merchants and publishers together. A set value per action is just the start, much like affiliate program, Google can introduce commission based pricing aswell. To run this model, Google requires you to implement their conversion tracking too, so this means they will be able to gather yet more valuable data.