Googles New Ad Program Takes On Affiliate Marketing

Amid click fraud concerns and indexing problems, Google is quietly testing a new affiliate marketing program for site owners and advertisers.

Google is currently testing a new advertising program that pays site owners based on demonstrable post-click actions.

The program, called Cost-Per-Action, was revealed via an invitation e-mail from the Google AdSense team to Web site owners.

"The Google AdSense team would like to invite you to test a feature that provides you with a new way to earn revenue from your Web site by hosting ads that are compensated based on a Cost-Per-Action [CPA] basis," read the e-mail.

"These ads are very different in that you will be able to choose amongst a selection and you will also have more flexibility in promoting them."

Google representatives were not immediately available for comment.

The CPA ads differ from AdSense ads in that a site owner gets paid whenever a visitor clicks on an ad and performs a specific action, such as purchasing a product from the advertiser.

An AdSense text ad, on the other hand, generates revenue for the site owner if a user simply clicks on the ad.

The CPA ads are not designed to compete with AdSense ads, said the e-mail, as they will display across a "Content Referral" network that is separate from the AdSense network. Google also said the CPA ads would appeal to a different type of user.

"This is really about increasing accountability and measurability of internet advertising," said Rob Sanderson, analyst at American Technology Research.

Googles CPA model may provide an advertising system which companies that are not using AdSense—or have been the victims of click fraud in the past—will be more comfortable with.

"In the aggregate, Googles advertising model is a self-healing model because its auction-based," Sanderson said. "Now, they may be trying to offer remedies to those they feel have been the targets of click fraud or who have been left out of the system, fairly or unfairly."

/zimages/4/28571.gifClick here to read about how tipping is encouraged at some AdSense Web sites.

David Jackson, writing on Seeking Alpha, said he thought this was Googles ValueClick killer, referring to the affiliate marketing company.

"Google has greater resources than ValueClick, a larger advertiser base, and the advantage of being able to offer publishers a full range of ads based on page views [CPM], clicks [CPC] and now actual purchases or leads [CPA]," Jackson wrote.

"Google can translate the performance of all these ads into "effective CPMs," allowing publishers to compare and optimize for whichever type of ad produces maximum revenue." Google is testing this program amid growing concerns about click fraud, a process wherein advertisers are forced to pay for spurious clicks on their ads. Google recently settled a $90 million click fraud case.

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