Google has expanded its pay-per-action advertising beta for AdWords, pitting Google more squarely against affiliate advertising programs.
Advertisers choose how much they want to pay for a user to complete a pre-defined action like a purchase, newsletter sign-up, or other conversion. Publishers must agree to that fee and action before placing a PPA ad on their sites.
Publishers in the Google content network may select between individual ads, a shopping cart of ads, or a specific keyword that is relevant to their site's content. The ads are not part of the auction for AdSense for content ad units. Ads are in the form of text, images, or in-line text ads, which publishers can incorporate into their content.
To be eligible for the program, advertisers must have enabled AdWords conversion tracking and received more than 500 conversions from their CPC and CPM-based campaigns in the past 30 days. Beginning today, advertisers that qualify will see an alert in their AdWords account informing them that they can now create pay-per-action campaigns. Going forward, qualified advertisers will be automatically added to the beta on a rolling basis.
Kate Kaye at ClickZ asked around and found that depending on who you ask, this will either spell the end for affiliate networks, or a minor blip on Google's balance sheet.