For those who have been in the search marketing world fro some time, Google’s ad model, Adwords, has become the highlight of paid search marketing and the center of controversy in the click fraud debate. Google’s popular advertising model has been based on a cost-per-click basis, until now. This week, Google brought a new ad model into beta testing based on cost-per-action. This new model allows the advertiser to only pay an amount when a desired action is complete (ie: lead conversion, product purchase, etc). This allows the advertiser a greater degree of control over when they pay for a lead and further helps reduce the amount of click fraud that advertisers are subject to with the current cost per click model. The even better deal is that you (the advertiser) decide how much you want to spend per action. While you are able to set up a budget with Adwords and bid on the keywords that you want to advertise under, you have little control over the actual CPC because the bid is affected by other users. And even then, there was no way to ensure that the click actually generated a conversion. This changes that and helps to ensure that advertisers pay for actual conversions.
In the long run, there is a lot of change and evolution that this ad model will make before it is ready for prime-time and even then it will not take the place of the current ad model, but it will boost the confidence of the smaller advertiser in which ad budgets are a primary concern. Way to go Google.