Google tries 'cost per action' model

Posted on 23 Jun 2006 at 10:28

Google is launching its own affiliate marketing network where websites that host ads from Google are paid for any action the visitor makes rather than just clicking on a link.

The search engine has invited a number of web site owners to take part in the pilot programme that will see site owners getting extra payments if their visitors take some kind of beneficial action on the advertisers' sites - such as buying a product or requesting further information.

The new 'cost per action' (CPA) programme is not a replacement for the existing AdSense system but is said to run in parallel with it as the Content Referral network. In addition, the website owners have a greater say in the kind of ads that appear on their site instead of blindly displaying whatever ads Google chooses to send them. Web owners will be able to choose from a selection and will have greater flexibility in promoting them such as putting text alongside the ad and recommending it - although simply saying 'click here' is not allowed.

Along with incentivising website owners to encourage their visitors to respond to the advertiser, the new scheme will be less susceptible to click fraud. The prevalence of click fraud is becoming a serious problem for the advertising networks as response to traditional contextual advertising starts to level off after a period of rapid growth. Earlier this year Google settled a click fraud case for $90 million in legal fees and compensation.

Author: Steve Malone