Advertising on Google Adwords has predominantly been based on the Pay-Per-Click (PPC) model. However, we are now learning that the Mountain View based search engine company is now working on a new Cost-Per-Action model that will charge advertisers for a completed action within the website rather than charge for an ad click.
This could be huge and more beneficial to the advertiser as well as Google. Competitive keywords are right now bid at close to $5 – $10 per click which can be huge expenditure for a lot of advertisers. With CPA, advertisers would tend to spend close to 8%-10% of every closed sale which is not only better on the ROI front, but can also help Google make more money off high-value items like jewelry or machinery.
Here is a screenshot of how the ads look (as seen from the tests Google has been conducting)