Google is running a beta test to trial ‘Pay per Action’ advertising. To date, many advertisers will associate Google with the pay per click (PPC) model. Pay per click was in itself a big advancement on the traditional CPM (paying for audience eyeballs, rather than response), but paying for an advertiser-nominated action is a mighty breakthrough for direct selling advertisers.

The traditional advertising model run by TV, radio, press and outdoor, as well as direct mail is based around buying what is in effect a viewing by the target audience. But nothing more. The risk beyond that lies entirely with the advertiser. What’s amazing about pay per click this that you don’t pay simply for the privilege of being seen, you pay when people act upon your message and click through to your site. Google* shares the risk of getting a response with the advertiser. Google’s Pay per Action model takes this sentiment even further, you don’t pay to be seen and you don’t even pay to get a click through. You only pay when your visitor performs a nominated action like submitting their email address, signing up for a newsletter, becoming a lead, or even a customer. This is without doubt great news for all direct selling advertisers and to some degree a nail in the coffin of the traditional advertising model.

You may be asking, “How do the financials work, for Google and for me?”. Well you’ll still effectively have to bid (on the content network) for the action that delivers your sale. Of course other advertisers will also be bidding for their sales at the same time. Google will have estimated that the financial yield for getting people to bid for actions may well be higher than the yield from allowing them to bid for clicks. Of course, if they weren’t sure this beta test will allow them to find out.

Whether or not we see Google making Pay per Action a mainstream product may well depend on how this test works for Google as well as how it works for online advertisers.

*And of course, all the other pay per click suppliers