Google Cost per Action is in Beta

• Posted by: kyle
• On: 06/22/2007 06:24:30
• In: Google

Widely discussed and now into fruition is the Google Adwords Cost per Action advertising model. This is something that has been widely anticipated by advertisers, no longer are we simply paying for clicks, but now for completed actions.

Widely discussed and now into fruition is the Google Adwords Cost per Action advertising model. This is something that has been widely anticipated by advertisers, no longer are we simply paying for clicks, but now for completed actions.

For the business to business market, generally focused on lead generation, this is a massive move forward. B2B marketers are acutely aware of the cost of a lead and therefore through the Adwords platform pay specifically that value. The cost per action model works on completed actions or conversions such as downloading a whitepaper, completing a form, or signing up for a webinar.

As the product is still in the beta phases its release is not available to everyone. Conversion tracking must be in place on your account and your account must have over 500 conversions per month.

Google analytics does not need to be installed. Only the Adwords conversion tracking code must be in place. Due to the test only being in beta and open to those advertisers with over 500 conversions, this shouldn’t be a problem.

The PPA ads are eligible to appear on the publisher websites in the Google content network. Individual publishers can choose the place for PPA ads, or allow Google to select the highest converting PPA ads related to the keywords they choose.

The first step to implementing a Pay per Action (PPA) ad campaign is to, of course, define the action. What is it that you want to the user to do on the site? Secondly, know how much this action is worth to you. 

Implementation of the PPA ad is fairly painless, so long as you know how much a conversion is worth to you. If you don’t know, PPA could get costly very quick. The first step to implementation is to ensure the conversion tracking has been implemented on the site so that your actions can be tracked. If you have already defined a conversion, you simply need to define how much that conversion is worth.

Creating your first campaign can be done in 6 steps:

1. Enter the name of the product or service you would like to advertise
2. Submit 20-50 of your top performing, relevant keywords publishers would use to locate your product or service
3. Name your Campaign and Ad group
4. Select the countries your ad will show in. Google will only show your ad to publishers within the identified countries.  At this point, no other geo targeting options are available.
5. Create your ad. Adwords has now implemented a new text link ad format. Text link ads consist of a single link of hyperlinked text (up to 90 characters) although shorter text link ads are recommended.
6. Set your daily budget. This is an interesting development. Setting your budget high will allow for greater numbers of conversions and so long as you know the value of a lead, budgeting for this should not be an issue. However the problem comes in with capacity. How many leads can your sales department handle and at what point do you reach diminishing returns? Detailed sales analysis will be able to determine this amount and your budget should also be set to remain within forecasted marketing budgets.

Google has assured us that the information in your account will never be released (not even in an aggregate report) nor will your stated value per conversion be used to market additional Google products to you.