June 22, 2006 11:07 AM PDT

Google tests new ads

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.

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14 comments

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Google needs to improve system
Their ad system needs to be upgraded.
<a class="jive-link-external" href="http://www.techknowcafe.com" target="_newWindow">http://www.techknowcafe.com</a>
Posted by mystereojones (46 comments )
Reply Link Flag
Google needs to improve system
Their ad system needs to be upgraded.
<a class="jive-link-external" href="http://www.techknowcafe.com" target="_newWindow">http://www.techknowcafe.com</a>
Posted by mystereojones (46 comments )
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Stop advertising
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.
Posted by ftpaddict (9 comments )
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Stop advertising
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.
Posted by ftpaddict (9 comments )
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Awesome! - finially
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!
Posted by rturner2 (125 comments )
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Awesome! - finially
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!
Posted by rturner2 (125 comments )
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Isn't this just another way of saying "affiliate program"
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?
Posted by Maccess (610 comments )
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Isn't this just another way of saying "affiliate program"
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?
Posted by Maccess (610 comments )
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Google test new ads - I applaud them.
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 cant wait to try it out.

www.g3creative.co.uk
Posted by g3 creative (13 comments )
Reply Link Flag
Google test new ads - I applaud them.
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 cant wait to try it out.

www.g3creative.co.uk
Posted by g3 creative (13 comments )
Reply Link Flag
One piece of information is missing
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?
Posted by qazwiz (208 comments )
Reply Link Flag
One piece of information is missing
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?
Posted by qazwiz (208 comments )
Reply Link Flag
better than adsense cpc
I think that new ads will be more valuable
for advertisers.
Posted by saido.org (2 comments )
Reply Link Flag
better than adsense cpc
I think that new ads will be more valuable
for advertisers.
Posted by saido.org (2 comments )
Reply Link Flag
 

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