Google Tests Action-Priced Ads

NEW YORK Google said it has begun a test of a new ad pricing structure that allows marketers to pay only when customers perform specific actions.

Advertisers specify actions they will pay for, such as newsletter registrations, brochure downloads or product sales, as well as prices.

Through a tag on the advertiser’s site, Google tracks visitors’ responses.

Google said the test ads would not run on its search results pages, but instead on its AdSense network of content sites. And AdSense publishers would get unprecedented control over the ads that run on their sites if they choose to accept the pay-per-action ads. They would be able to choose from groups of ads or individual promotional offers.

By moving to a cost-per-action model, Google could entice more advertisers to join its AdSense network, where agencies frequently report lower conversion rates for ads compared to search results pages.

Advertisers can display either text or image ads within the pricing format.

Google now offers three pricing models: cost-per-click, cost-per-impression and cost-per-action.

The overwhelming majority of Google’s ads are still priced on its original cost-per-click model.