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June 22, 2006 11:07 AM PDT

Google tests new ads

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Google is testing a new online-ad system in which advertisers pay only when their ad leads to a purchase or a sales lead, the company confirmed Thursday.

The new cost-per-action system will be a separate ad auction system from the current cost-per-click setup, Google spokesman Brandon McCormick said. The ads are being offered through Google's AdSense unit, which places ads on Web sites.

AdSense publishers will be able to choose from a selection of ads and will have more flexibility in promoting the ads, according to Google.

Because they'll be tied to a purchase, the new ads are expected to be auctioned at higher prices than cost-per-click ads, which cost advertisers every time an ad is clicked on, despite whether it leads to a sale. The ads also would cut down on click fraud, which occurs when ads are clicked on without the intention of making a purchase.

"We're always looking for new ways to provide effective and useful features to advertisers, publishers and users," Google said in a statement. "As part of these efforts, we are currently testing a cost-per-action pricing model to give advertisers more flexibility and provide publishers another way to earn revenue through AdSense. We're pleased with how the test is progressing and will continue to gather feedback from advertisers and publishers."

Kelsey Group analyst Matt Booth said the move was smart for Google and that Yahoo also will eventually be offering cost-per-action ads. "Actions like telephone calls, lead forms or transactions are more valuable than clicks," he wrote in an e-mail statement.

McCormick would not say how many advertisers are participating in the test, which was first reported by David Jackson on his Seeking Alpha blog Wednesday.

See more CNET content tagged:
advertiser, Google AdSense, publisher, Google Inc., purchase

Add a Comment (Log in or register) (14 Comments)
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Google needs to improve system
by mystereojones June 22, 2006 11:59 AM PDT
Their ad system needs to be upgraded.
http://www.techknowcafe.com
Reply to this comment
Google needs to improve system
by mystereojones June 22, 2006 11:59 AM PDT
Their ad system needs to be upgraded.
http://www.techknowcafe.com
Reply to this comment
Stop advertising
by ftpaddict June 22, 2006 1:40 PM PDT
The Internet has been flooded with annoying ads. I've gon from loving Google to loathing it. Think back to the year 2000, when Google was just a clean search engine, a privately owned company, and the jewel of the World Wide Web. Now it's just so full of trash. "Relevant results" have been replaced with "Relevant ads", which is why I'm seriously considering Clusty or another lesser known search engine. Thumbs down for Google.
Reply to this comment
Stop advertising
by ftpaddict June 22, 2006 1:40 PM PDT
The Internet has been flooded with annoying ads. I've gon from loving Google to loathing it. Think back to the year 2000, when Google was just a clean search engine, a privately owned company, and the jewel of the World Wide Web. Now it's just so full of trash. "Relevant results" have been replaced with "Relevant ads", which is why I'm seriously considering Clusty or another lesser known search engine. Thumbs down for Google.
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Awesome! - finially
by rturner2 June 22, 2006 5:07 PM PDT
This is brilliant! I will advertise using this model and will be prepared to pay like 1000% more then I will for a click through!
Reply to this comment
Awesome! - finially
by rturner2 June 22, 2006 5:07 PM PDT
This is brilliant! I will advertise using this model and will be prepared to pay like 1000% more then I will for a click through!
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Isn't this just another way of saying "affiliate program"
by Maccess June 23, 2006 2:06 AM PDT
Smart idea, Sergey. That's been around quite a while: It's called an affiliate program.

But, hey, it's a smart idea. Where can I sign up?
Reply to this comment
Isn't this just another way of saying "affiliate program"
by Maccess June 23, 2006 2:06 AM PDT
Smart idea, Sergey. That's been around quite a while: It's called an affiliate program.

But, hey, it's a smart idea. Where can I sign up?
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Google test new ads - I applaud them.
by g3 creative June 23, 2006 5:04 AM PDT
Google offering cost-per-action ads. This is really good news it means Google are confident that if you place an advert with them you are going to get business.

I applaud them for this move and can?t wait to try it out.

www.g3creative.co.uk
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Google test new ads - I applaud them.
by g3 creative June 23, 2006 5:04 AM PDT
Google offering cost-per-action ads. This is really good news it means Google are confident that if you place an advert with them you are going to get business.

I applaud them for this move and can?t wait to try it out.

www.g3creative.co.uk
Reply to this comment
One piece of information is missing
by qazwiz June 23, 2006 4:47 PM PDT
What will happen if an item is returned?

Will the business have to further inflate the Shippind and "handling" charges to cover loss by returns?
Reply to this comment
One piece of information is missing
by qazwiz June 23, 2006 4:47 PM PDT
What will happen if an item is returned?

Will the business have to further inflate the Shippind and "handling" charges to cover loss by returns?
Reply to this comment
better than adsense cpc
by saido.org September 23, 2006 11:44 PM PDT
I think that new ads will be more valuable
for advertisers.
Reply to this comment
better than adsense cpc
by saido.org September 23, 2006 11:44 PM PDT
I think that new ads will be more valuable
for advertisers.
Reply to this comment
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