• Ad Age, Monday, June 26, 2006 11:30 AM

Marketers are always demanding a strong return on investment for their advertising dollars, and search engine Google says it has found a way to satisfy them. It's called "cost per action," and it only charges an advertiser for ads that generate sales or qualified sales leads. The new system is seen as a potential alternative to the traditional "cost per click" model that can result in click-fraud, which occurs when ads are clicked on repeatedly to paint a false picture of their value. Analysts and search marketers don't expect the "cost per action" program to completely replace cost-per-click, but say strong demand exists for more accountable ad systems. "Marketers love the idea of cost per action because clicks don't mean a whole lot in terms of actual value," said independent search expert Greg Sterling, formerly of Kelsey Group. The new cost per action model will be part of Google's AdSense program, and will exist as a separate ad auction so as to not compete directly with Google's current cost per click model. AdSense is Google's non-search advertising program in which Web publishers allow Google to serve text or image ads on their sites.

Read the whole story at Ad Age »