Google launched Pay Per Action ads to a very limited user base on March 20. Now, Google is launching this beta product globally.
Google Pay Per Action is a new pricing model available to advertisers to specify a dollar amount they would like to offer publishers for successful conversions. Advertisers will only pay upon a completed conversion and not based on a click or impression of the ad. By expanding the Pay Per Action model to more publishers, advertisers who are testing the product can better see if the model will work.
Right now, there is a lack of data collected by advertisers for them to make a decision on the effectiveness of such a pricing model.
I described how both AdSense Pay Per Action works and how AdWords Pay Per Action works in the past.
Postscript: Here is the official press release from Google.
Related Topics: Google: AdWords
I have seen both sides of fraud – cpa and cpc. The majority of fraud is committed by affiliates participating in ad networks. Switching models will not change the ability for fraud to occur. CPA types of fraud are typically harder and more time consuming to catch. To catch a fraudulent transaction (sale, download, registration), the merchant would need the ability to track the particulars about the transaction, trace that specific transaction back to a paid search advertisement from a specific date and time, and then notify the search engine. Fraud in transactions can take weeks or months to detect. For example, if the advertiser considers a lead to be an action, then an easily spoofed persona can look like a real lead. Until a marketer or sales person attempts to contact the lead, the lead will easily appear to look proper.
The best answer to avoid fraud in any online model is tracking and 3rd party auditing in order to validate transactions of all kinds – clicks, visits, leads, sales, downloads, or whatever your metric of conversion is for that ad.
To find out how fraud is effecting your search advertising, you can join the click fraud network for a free diagnostic report: http://www.clickfraudnetwork.com