Google's New CPA Ads: Killer Marketing Tool

Jun.22.06 | About: Alphabet Inc. (GOOG)

By Carl Howe

Seeking Alpha founder David Jackson noted yesterday that Google has just launched a cost-per-action ad service, and John Battelle, author of The Search, has noted the implications of the service as well (that is notable since John has his own ad network, Federated Media). What does that mean? It means that an advertiser can place an ad, and only pay for it if the customer does a specific action, like buy a product, or join a list.

David interprets this move as a ValueClick-killer and just another affiliate program. But to me, the real power here is that Google now is becoming a one-stop shop for everything a marketer wants to drive buyers down the awareness funnel toward purchase. Google's CPM ads build general brand awareness. Cost-Per-Click ads allow marketers to test and refine messages that cause buyers to act. And now with Cost-Per-Action ads, marketers have a advertising tool that delivers a defined return-on-investment.

Why is this such a big deal? Because a marketer can now pitch the CEO with the following story:

"If you give me a million dollars to spend with Google, I can provide you with ten million in sales. Interested?"

With defined ROI like that, advertising with Google becomes a no-brainer. If Yahoo, eBay, MSN, and Amazon aren't worried about their advertising businesses, they should be. With more than $1 trillion being spent each year on marketing, Google has the potential to attract billions of that spend by providing clear, measurable results. No one else has demonstrated their clarity of vision around Internet marketing. If they don't watch out, Google could be the Microsoft of Marketing in a few years.

Full Disclosure: I have no positions in Google, Microsoft, Yahoo, eBay, or ValueClick