A new advertising system has been announced by Google. Instead of its now traditional cost-per-click arrangement centered around Adsense and AdWords, the company has introduced “Pay-Per-Action — Pay only for actions that you define”.

The new system will work by defining the action that you want a user to perform when they visit your site, such as signing up for your newsletter or purchasing a product. Then you’ll set the amount that you’re willing to pay when this action is completed.

The point of the procedure is that you’ll only pay when a user clicks on your ad, visits your site, and completes your desired action.

Pay-per-action ads complement your current campaigns by providing a new pricing model that extends your reach and allows you to pay only when a defined action is completed on your site. This beta feature is currently available to AdWords advertisers in the United States on a limited basis as part of our beta test.

PPA ads only show up through being displayed on sites that participate in Google's content network. They won't appear on Google or in its search network.

As soon as Pay Per Action is released within the UK we will update our services to provide this new and exciting advertising method.


The following information source is: http://adwords.google.com/support/bin/answer.py?answer=61449

Pay-Per-Action Advertising Overview

What is pay-per-action advertising?
Pay-per-action advertising is a new pricing model that allows advertisers to pay only when specific actions that they define are completed by a user on their site. Rather than paying for clicks or impressions, advertisers can choose to pay when a user makes a purchase, signs up for a newsletter, or completes any other clearly defined action that they choose. Pay-per-action ads are eligible to appear on publisher sites in the Google content network, and publishers can choose specific pay-per-action ads that are relevant to their site to run in new ad units that they create.

How much does pay-per-action advertising cost?
Only you can decide how much you want to pay for your pay-per-action advertising. You determine how much you're willing to offer for each specific action to be completed on your site, whether it's $5 for a purchase or $1 for a newsletter sign-up. You can also control your spending by setting a daily budget.

What information will publishers see about my pay-per-action ads?
Publishers will be able to view your product name, your product description, your logo, and each of your defined actions along with their associated offers. They will also be able to view your complete pay-per-action ad to determine, whether it will be a good fit for their site and visitors.

We also encourage you to provide a URL for your company, product, or service that will give the publisher more details about what you are offering and how it might appear to their users.

Where will my pay-per-action ads appear?
Your pay-per-action ads are eligible to appear on publisher sites in the Google content network. Publishers can choose to place specific pay-per-action ads in new ad units that they create, or allow us to serve the highest converting pay-per-action ads that are related to a topic that they choose.

What should my pay-per-action ad say?
Your pay-per-action ad should clearly convey your product and/or service. Since you're paying for a particular action, make sure to promote it in the text or image of your ad.

How do publishers choose my pay-per-action ad?
When you create a pay-per-action ad, you'll enter a series of terms or phrases that will describe your product or service to website publishers who are part of the Google content network. These terms or phrases will trigger your ads to appear when a publisher searches for ads within their account. Publishers also have the option to browse (by product category or view entire advertiser inventory) through ads rather than searching.

What ad formats can I use?
You can create text, image, or text link ads for your pay-per-action campaign.

What is the text link format for pay-per-action ads?
Text links are hyperlinked brief text descriptions that take on the characteristics of a publisher's page. Publishers can place them in line with other text to better blend the ad and promote your product.

For example, you might see the following text link embedded in a publisher's recommendatory text: "Widgets are fun! I encourage all my friends to Buy a high-quality widget today." (Mousing over the link will display "Ads by Google" to identify these as pay-per-action ads).

Though the maximum length of a text link is 90 characters, we've found that shorter links perform better because they allow the publisher use the link in more places on her/his site and in different context. The maximum length is 90 characters but less than 5 words is best. Even better, just use your brand name to offer maximum flexibility to the publisher.

How should I choose a daily budget for my pay-per-action ad?
Because with pay-per-action ads you'll only pay for precisely the actions you want users to take, your daily budget should only be constrained by physical inventory limits. We encourage you to set your daily budget as high as possible, since you'll only pay for the results you want.

How does my daily budget control when my pay-per-action ad will appear?
The daily budget that you set controls how often your pay-per-action ad will appear on publisher websites, and when it will stop being displayed within publishers' accounts for them to select and place on their websites. Once your daily budget has been met on any day, your ad should no longer appear on publisher's sites, and we will prevent it from being selected by publishers.

What kind of reports do you offer for pay-per-action ads?
For each pay-per-action campaign, you can view clicks, impressions, conversion rate, total conversions, and total cost.

How do I define an action?
During your pay-per-action campaign set-up, we'll give you the opportunity to identify the different types of action that you'd like to pay for. You can list as many action types as you wish, either by choosing from our pre-existing action types, or by entering your own. For each type of action, you'll need to provide a description that will be displayed to website publishers. In addition, you'll need to make an offer for how much you are willing to pay for that type of action.

How do I track my actions?
Setting up tracking for pay-per-action ads is very similar to setting up conversion tracking. In fact, if you already have conversion tracking installed on your pages, tracking your actions will be a cinch, as you can simply add a CPA bid to enable this code for your pay-per-action campaign.

Can I identify more than one type of action?
Within any campaign, you can track several different types of actions and pay different amounts for each one. For example, you could choose to pay $5 for a sign-up and $10 for a purchase.

Why might I exceed my daily budget?
With pay-per-action ads, you pay when a user, who reached your site through your ad, completes an action you've identified. Sometimes this action may be taken days after the user has first visited your site. Note that advertisers will remain responsible for conversions that occur up to 30 days after a pay-per-action ad was clicked.