Google just announced that they’ve started testing a new advertising option called pay-per-action (PPA). With click fraud eroding confidence in pay-per-click (PPC) advertising, Google’s new offering ensures that advertisers pay only when a customer takes a specific action, such as filling out a form or purchasing an item.

With pay-per-click (or cost-per-click) advertisers pay each time an advertisement is clicked. PPC ads are extremely vulnerable to fraudulent clicks which inflate the total bill for the advertiser. PPA ads help combat this by making sure the advertiser receives something of value (a customer’s information, a sale, etc.) in exchange for their advertising fees.

Other companies are already doing this (also called CPA or cost-per-acquisition) but Google is just now entering the game. This should be great news to smaller companies who are more price-sensitive and concerned about the cost of click fraud.

More on the subject:

Google’s announcement
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