StrategyWire view and links - Google launches Pay-per-Action facility for Adwords
Google is launching a pay-per-action (PPA) facility for its AdWords service in what it says is an attempt to combat click fraud. The function is beta testing in its US AdSense market and will run separately to Google's regular ad auction service. Under the new system advertisers only pay when a user takes a predetermined action, such as purchasing a product or signing up for product news, after seeing an ad on the network. Google then takes a cut of any incentive offered to publishers by advertisers, removing its revenue share before passing the net incentive on to the publisher. Publishers can view any PPA ads before they are put up online and can select PPA ads relevant to keywords on their pages.
Google is also supplying a 'text link ad' format that presents JavaScript ads as a text link, aimed at bloggers who want to work with text links as opposed to large images or Flash ad blocks. Google claims the scheme should help cut down on click fraud, where a party generates false ad clicks in order to boost pay-per-click revenue, with payment only delivered on successful completion of a given action. Click fraud tracking agency Outsell claims an average of 14.6% of clicks are fraudulent, costing Microsoft, Google and Yahoo! around USD1.3bn a year in advertising revenues. An Outsell survey of advertisers claims that 37% have reduced or plan to reduce their pay-per-click spending while 16% no longer use pay per click at all.
The scheme is also seen as a form of affiliate marketing network, although Google says it has no intention of operating as a competitor to other affiliate marketing firms, instead merely offering an add-on to its AdWords service, with the complete AdWords package providing a completely different service to that of affiliate networks.
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