Google Expands Pay-Per-Action For AdWords

by Tameka Kee, Jun 21, 2007, 6:00 AM

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Google has expanded the scope of its Pay-Per-Action (PPA) pricing model for AdWords, launching a global beta in some 24 languages.

With PPA, consumers still click an ad, but advertisers only pay when they actually complete a predefined action (such as a purchase or signing up for a newsletter) on their site.

The search giant launched a U.S.-only beta test of PPA in March, and advertisers like executive job search site TheLadders.com were one of the early adopters--providing feedback on its performance and usability.

"The ability to supplement our existing cost-per-click campaigns with a model that rewards qualified leads made a lot of sense to us," said Alexandre Douzet, executive vice president and general manager, TheLadders.com.

Others, like digital marketing firm iMarketing Ltd, declined to be part of the beta--preferring to gauge a wider reaction to the pricing model's ROI and functionality.

"We knew it would take a bit of time before our big clients would want to try it with their campaigns," said Francis Dimayuga, senior manager, search marketing, iMarketing Ltd.

But starting today, advertisers who have enabled conversion tracking, and received more than 500 conversions from their CPC- and CPM-based campaigns in the past month will be automatically added to the beta on a rolling basis. The option to create PPA campaigns and set the desired conversion action will be integrated into their AdWords accounts.

While online retailers and e-commerce sites seem like the obvious candidates for PPA campaigns, the pricing model has value for "anyone in the business of lead generation," said Rob Kniaz, product manager, Google. "Most advertisers have a specific number of conversions, or a specific ROI they're looking for, and this model can bring those two together."

Google also touts PPA as a boon to AdSense publishers in search of greater control over the ads shown on their sites. Publishers can select PPA ads individually, as a group, or by keyword--and they don't compete in the overall auction with CPC or CPM-based ads.

Some search marketers add that the PPA model represents a new attempt to garner business from potential advertisers that are wary of escalating PPC costs, as the return on [Google] and [Yahoo] advertising dollars has been dwindling for quite some time.

According to Alan Schneider, vice president of operations, Mr-SEO.com: "Advertisers have always had CPA options outside of Google AdWords. It's been around for a long time. Will Google CPA affect PPC advertising on a grand scale? Not really. Web site owners who rely on CPC will simply opt for whatever option will pay the best dividends for their virtual real estate."

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