Cutting to the Click

Interesting to see Google testing out pay per action ad models in a move that would shake up its revenues and which would also stop click fraud.

Google is pretty good at catching fraudulent clickers and not charging advertisers for the clicks, but moving to a cost per action model would be a big step for the industry. At present it is only talking about using the model on its AdSense program, not the bigger AdWords market where ads sit next to search results on the search engine.

However, adopting the model of payment that has been used widely in the affiliate marketing world for many years could ultimately bring better revenues for Google as advertisers will find it more effective. Google just needs to find a way of balancing this against the negative impact it could have on publishers, who previously have shared revenue for every ad clicked.

If it proves a success expect other engines to follow suit.