Google Tests Pay for Performance Ads

23 June 2006

Internet search giant Google is testing a form of online ads where clients pay only when users buy a product or generate a sales lead.

The 'cost-per-action' ads, also known as affiliate marketing networks, let merchants sign up independent websites to help find new customers for their products or services.

The website owner is paid only when a customer actually makes a purchase, or when they perform some other pre-determined action such as filling in a form on the merchant's site with their personal details.

The Mountainview, California-headquartered search leader is trialling CPA on its AdSense network and hopes it will help businesses track more effectively whether their online ad spending is generating sales.

The approach may also reassure some advertisers about click-fraud, a practice whereby users maliciously click on ads to raise costs for competitors or line their own pockets.

Comments Danny Sullivan, editor of "People have been asking for cost-per-action advertising for ages. It's definitely nice to have the additional option."

The test is part of Google's wider expansion of its ad offerings as the company seeks to sustain surging sales, which almost doubled to $6.07 billion (€4.8bn; £3.3bn) last year. Google has also added graphical and video ads to give companies more ways to promote their products online.

Says the company: "We're always looking for new ways to provide effective and useful features to advertisers, publishers, and users."

Data sourced from Financial Times online; additional content by WARC staff