Google Launches Cost Per Action AdSense

rustybrick writes "Google has launched an invite only test of CPA (cost per action) AdSense ads. So instead of getting paid per click or per impression, you now can get paid for an action, such as a sale or lead referral."

Comments

Re:This is something I've been waiting for

[panaceaa]

I wonder how ads purchased using CPA will rank versus ads purchased using CPC. Currently advertisers must calculate their conversion ratios and profit margins and judge whether an ad is worth running at the current rates. But with Google providing CPA, advertisers only need to worry about profit margin, since Google's advertising costs are now fixed per sale. Therefore I would imagine that Google is calculating conversion ratios per advertisement behind the scenes, and then only showing ads for the products with the highest conversion ratio (multiplied by the CPA rate). Very cool.

But what if you're trying to sell a product that has a very low conversion ratio such that Google refuses to display your ad? Must you bid a higher CPA rate or find ways to increase your conversion ratio through site redesigns or lower prices? It will be interesting to see how Google educates advertisers on these issues.