Google has announced a new ad service that allows advertisers to pay for conversions instead of clicks or impressions. 

The new option of conversion-based bidding, called “Pay for conversions”, is aimed at display campaigns, MediaPost reports.

Ad buyers will only be charged when users convert on their site or through their app, so advertisers who use the platform set a Target CPA (or cost per acquisition) in the Bidding section of campaign settings.

Announcing the service, Google illustrated how it would work: “Let’s say your target CPA is $10, and you drove 30 conversions over the weekend. You’ll pay exactly $300, with an actual CPA of $10.”

Google makes it clear the option to pay for conversions is only available for those using Target CPA with Display campaigns. 

In a post, Brent Besson, product manager at Google Ads, said marketers will never pay above their CPA.

Google explains that pay for conversions uses the same algorithm as paying for clicks; those using it will still use the Target CPA bidding strategy, but instead of paying for clicks, charges will be made for conversions.

However, advertisers can’t use the service unless their Google account has had at least 100 conversions in the last 30 days. Plus, the time between a click and a conversion must be within seven days for at least 90% of those 100 conversions.

Account holders can check their conversion lag time in the Google Ads UI.

MediaPost also reports that advertisers can’t use “pay for conversion” linked to offline conversions, such as store visits.

Sourced from MediaPost; additional content by WARC staff