Google Pay Per Action Test

Google has announced that they will be beta testing a pay per action pricing model for their content network.  This is partially a response to the click fraud issue as the advertiser doesn't pay unless a specified action occurs: reservation, email sign up, meeting request, pageview, etc..  Where and when the ad displays will be based upon the profitability for Google -- and relevancy I assume.  This is going to be an interesting feature to test and see which drives the best return. We know the cost per acquisition for our PPC ads today.  Can we be as effective if we set the PPA at a lower cost? I suspect that the results will vary. 

It will be fun to test some new sales strategies with PPA.  For example, during need period, a hotel might be willing to pay a substantial fee for a reservation that is equal to or higher than the commission paid to Expedia, Travelocity or Orbitz. The third party travel sites won't be able to compete with those rates unless they want to lose money.  It has always been challenging to help a property fill last minute business.  In many cases, I actually recommend that they use a third party site since they do have the ability to help influence a last minute booking due to the amount of people that visit their sites. The problem is that the hotel typically has to give the site a higher commission rate to get the promotion.   The PPA model gives us an additional option.  Buying ads to drive last minute business has not been completely ineffective in the past, but the ROI has not always been where we would like it to be.  And with a set budget, the ad may be down if the budget is quickly exhausted. I think PPA will allow us to be much more aggressive and allow us to essentially set the ROI on the campaign.

As an aside, I also wonder what the impact will be on affiliate programs and how spammers will figure out a way to manipulate this system?