Google changes tack on pay-per-action offerings

Google is rolling out two new offerings that let advertisers more precisely target people who will likely be receptive to their products.

The new products will replace Google's AdWords pay-per-action beta, a program that will be phased out by the end of August as the company integrates technology from DoubleClick, the advertising and Web publishing network it acquired in April 2007 for US$3.1 billion.

One product is the Conversion Optimizer, a tool designed to manage how much an advertiser will pay for a "conversion," the goal the advertiser wants to achieve from a consumer, such as signing up for a newsletter or buying a product.

Web ads have traditionally been sold on the basis of impressions (the number of times an ad is displayed) or clicks (the number of times a viewer clicks on it) but conversions typically represent more value for an advertiser than impressions or clicks.

Advertisers naturally also want to pay the least amount possible for an ad. The Conversion Optimizer is an automated bidding tool which looks at three factors when deciding how much to bid for a particular ad on a publisher's Web site: a person's search query, the location of the user and how successful the particular Web site is at achieving conversions.

The tool then predicts the chances of success of an ad placed on that Web site, and the tool can then lower or increase the bid accordingly. Previously, the advertiser had to manually bid on the ad space, which potentially made ads more expensive to buy.

Advertisers can limit the maximum amount they will pay for an ad in the Conversion Optimizer, which then analyzes which are the best buys for the budget, wrote Trevor Claiborne of Google on one of the company's blogs.

The Conversion Optimizer can be used in conjunction with the Google Affiliate Network, a renamed network of publishers formerly known as the DoubleClick Performics Affiliate Network. That network links advertisers who want to reach publishers with a U.S. audience. Advertisers pick which publishers that meet their criteria in order to have ads served on those Web sites.

It also allows publishers to refer traffic to other publishers and receive a commission. But Google said it will suspend that part of the program, known as AdSense Referrals, by the end of August.

Google was a bit fuzzy on the reason why: "We are currently reevaluating the Google Referrals program to ensure that it is providing the best possible monetization opportunity for our publishers as well as meeting the needs of Google."

The company advised publishers that AdSense referral code on their Web pages will cease working then.

"In order to prevent a decrease in your AdSense earnings, we strongly encourage you to replace all referral ad code on your site with AdSense for content ad code prior to the last week of August," Google's support pages now read. "You can get this ad code by signing in to your AdSense account, selecting the AdSense Setup tab, and choosing AdSense for content as the product."

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