Google’s Inside Adwords blog announced a limited test of a new advertising system on Tuesday, which would allow advertisers determine the value of certain actions (pay-per-action, or ppc).
The AdWords Help Center has an even more extensively detailed explanation of what Pay-Per-Action is, and how it might work. in their Pay-Per-Action FAQ. In both, there’s discussion that under this kind of approach, the advertiser would determine what value a pay-per-action add might cost.
A new patent application from Google explores this concept of having advertisers define the value of a click, or impression, or action – such as a specifically defined conversion. This includes how much an advertiser might pay to appear on a specific site, or what they might be willing to pay for a certain number of impressions or clickthroughs for different keyword phrases. Pay-per-action is one part of this larger system, and the system could also include offline advertising options.
A long and detailed document, the patent application is worth a read if you engage in purchasing advertising through a search engine:
Flexible advertising system which allows advertisers with different value propositions to express such value propositions to the advertising system
Invented by Sumit Agarwal, Gregory Joseph Badros, and John Fu
US Patent Application 20070067215
Published March 22, 2007
Filed September 16, 2005
Different advertisers that may have different value propositions and that may desire different types of ad spots may effectively participate in an advertising network. An advertiser may express various value propositions using various types of offers, such as offers (or maximum offers) per impression, selection, and/or conversion (or some other user event). Probabilities of events, associated with offers, occurring may be used to allow different advertisers with different value propositions to compete against one another in an arbitration such as an auction. Advertisers may target the serving of their ads to keywords (search and/or content), particular publications or properties, particular vertical categories, other types of ad spots, etc.