It's Google's newest money-making baby: the Pay-Per-Action Ad model, currently only available to advertisers in the U.S. Under this model, advertisers only need to pay when customers perform a specific action on their site, which is pre-defined. It can include signing up for the site's newsletter, accomplishing sales transactions, signing up for a course online and the like. The new pricing model also allows advertisers to place a corresponding value to these actions.
Pros and Cons of the new Pay-Per-Action Ad model
Advertisers have better control over the cost of advertising since they will be setting the value for each action. They also pay only for actions that are completed on the site, unlike with older pricing models like CPM and CPC where advertisers shell out money even if the customer didn’t buy their product.
Advertisers can also predetermine their profits for every conversion since the value for each action is already set. There is no more need to constantly be on the lookout for their ROIs, thanks to the new PPA ad model.
On the other hand, PPA limits the advertisers' control over which websites their PPA ads will be shown. Currently, PPAs are only available as ads for Adsense through the Content Network. If an advertiser wants to limit the appearance of his PPA ads, he will have to use the site exclusion tool.
Advertisers also need to be careful with the prices they set with their PPA ads, given that they need to attract enough Adsense publishers and still have a value that can produce a good return on their investment.
For now, advertisers need to test the effectiveness of PPA ads compared to other pricing models. There might be some problems for the advertisers, but this is a good opportunity that will find a resolution in no time.
How about for publishers? Will Pay-per-action be a good money-making ad model?
It depends on the site. Review blogs might do well with PPA. But those celebrity blogs, I'm not so sure. This is because visitors who will most probably convert well for the PPA ads are those who are already "in the prowl". Not just the curious types, right?
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