Google has recently announced that it would start testing a new advertising strategy that would enable advertisers to pay only when consumers take action following the click, such as completing an online purchase. However, experts have said that actions that Google could be compensated for range from signing up for a newsletter to making a purchase. The latest aGoogle, experiment is clearly in contrast with cost-per-click ads, where advertisers pay when a consumer clicks on an ad and is delivered to an advertiser’s site.
Announcing the new program experiment, the company has said that it would expand a test of a system that allows advertisers to pay only when an ad spurs a consumer to take an action, be it purchasing a product, subscribing to a newsletter or signing up to receive a quote from a mortgage broker or car dealer.
For many advertisers the latest ad program, cost-per-action is quite appealing, as it greatly reduces their risk, as they are not charged for ads that are ineffective. On the other side, critics of this new program have extended that the push to make consumers take action could end up backfiring.