• by Shankar Gupta , June 23, 2006

Search giant Google has begun testing cost-per-action ads, in which marketers pay a fee only when users make a purchase, provide an e-mail address or take other specific steps.

A Google spokesman said the initiative aims "to give advertisers more flexibility and provide publishers another way to earn revenue through AdSense."

The test was first reported on the blog SeekingAlpha, where author David Jackson--who currently accepts AdSense ads--posted an e-mail from the Google AdSense team. "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," the e-mail read.

The e-mail also stated that publishers would have more control over how the ads were displayed. "These ads are very different in that you will be able to choose amongst a selection and you will also have more flexibility in promoting them," the e-mail said. "Since this is a test and these CPA ads are not regular ad units, we are giving you more flexibility in saying things like 'I recommend this product' or 'Try JetBlue today' next to the CPA ad unit. However, you should still not incite someone to click on the ad, so saying 'Click Here' is not ok."

According to the e-mail, the cost-per-action ads will not compete with Google's AdSense cost-per-click ads, and will be displayed on a different network, dubbed the "Content Referral network."

If Google cost-per-action ads become more widely available, the search giant could attract a large group of new advertisers to whom the model appeals. "It will attract advertisers that might have been using CPA networks," said David Berkowitz, director of strategic planning for search engine marketing firm 360i. "Given the success of CPA networks, I'd say a lot of advertisers are going to be asking questions about this."

The move, Berkowitz said, is a play at the non-brand advertisers on the Web--a contrast to programs such as image ads and site selection, which were targeted largely at big brand budgets. "This is clearly not a branding play right here," he said. "It's a little refreshing to see--even if Google is expanding its options a little, it's still sticking with its direct marketing roots."