Google to Sell Ads Using New Cost-Per-Transaction Model

By: Mike Shields/Mediaweek

Google is planning to test a program that will allow advertisers to purchase display or text ads using predetermined cost-per-transaction prices as an alternative to the traditional cost-per-click or cost-per-thousand pricing models offered by the company.

The beta test, which is set to launch in a few weeks, will be limited just to Google AdSense, which allows advertisers to purchase text and display ads that run alongside contextually relevant content–either on large publisher sites like NYTimes.com or on dozens of smaller blogs. Google has not said which publishers or advertisers have agreed to participate in this test.

Selling ads on a cost-per-transaction basis extends Google into the realm typically dominated by online ad networks that deliver bulk impressions to metrics-driven advertisers, such as cost-sensitive ecommerce brands. For this venture, the company is planning to allow participating brands to determine up front what pricing model suits them–whether they pay for ads that result in a direct sale or simply a signup for a brand?s email newsletter. Google says that publishers have the final say on whether they elect to accept such ads, and before they do sites will be given the opportunity to review the specifics of these potential cost-per-transaction campaigns.

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