Google testing new cost-per-action Adsense system

(NewsTarget) NewsTarget has learned that search-engine giant Google will be testing an online ad system in which merchants will pay only when an ad click ends in a sales lead or purchase.

Spokesperson for Google Brandon McCormick said the new cost-per-action structure would be an ad-auction system, separate from the cost-per-click system that is currently in place.

The ads are expected to auction at higher prices because they are tied to purchases. They would also cut down on click fraud, helping advertisers save money over ads for which they must pay for every click, regardless of whether a purchase results.

A Google statement said, "We're always looking for new ways to provide effective and useful features to advertisers, publishers and users. 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."

The feedback on the move itself has been positive thus far. Analyst Matt Booth of the Kelsey Group said Google made a smart move with the test, noting that Yahoo will also offer cost-per-action ads in the future.

There is no word from Google on how many companies will be participating in the test.