Google Planning Pay-Per-Sale Model?

Here’s what I think Google is building – A pay-per-sale advertising model.

CEO Eric Schmidt has already spoken out and specifically said that Google is not building a PayPal killer, “We do not intend to offer a person-to-person, stored-value payments system…The payment services we are working on are a natural evolution of Google’s existing online products and advertising programs which today connect millions of consumers and advertisers.”

They are working on a service that will extend their current programs and lay the groundwork for something more. Charlene Li believes Google is building a centralized micro payment system – which makes sense. Google would then grow into an open market facilitator. That’s a realistic possibility in the future.

But I think Google’s initial use of a payment system is to add a pay-per-sale model to their current pay-per-click advertising network. Merchants using AdWords to advertise and Google Wallet to process their sales will be able to track which ads lead directly to sales and at what cost. Merchants will be able to tap into the power of large scale affiliate marketing (ala Commission Junction). Publishers can then choose between which model to promote – AdSense for clicks or AdSense for sales.

Advertisers can also decide whether they want to generate traffic or pay for sales. A pay per sale model typically encourages a publisher to create a high quality and relevant web site – which is great for advertisers. Pay per sale will also alleviate click fraud issues, since there are fewer concerns about whether conversions are legitimate, and whether traffic is of low quality.

What do you think?

16 thoughts on “Google Planning Pay-Per-Sale Model?

  1. When you say “Pay-per-Sale”, you mean a flat fee per sale or per lead, right ? Anyway, this idea of a pay per sale already emerged back in 2003 at Google, because when you come from the CPM and you switch the CPC model, you can only think to the future already and then to the CPSsale.

    Now that Adsense brings a huge mass of inventory, the Per Sale begins to make Sense !

  2. I think they’d be focused on a percentage of sale method, instead of a flat fee. Flat fee doesn’t make sense because it doesn’t take into account high ticket items.

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  4. I absolutely love this idea. Makes perfect sense and seems the way to go. It’s like the next step up from ppc. seems like it would be much more accurate. Altough I’m still not sure wheather it’s what they are building when they refer to the Google Wallet. If they’re not, they should.

  5. Pay-per-sale is a superb idea and eliminates all ppc frauds. I agree with the comment made earlier that it should be by % and not flat fee. Wondering if there is any way to know when google announce such program?

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  7. This is definitely an interesting thought – if Google were to do a Pay-Per-Sale model they would probably see a lot of publishers upset (unless, of course, you could choose which one you wanted).

    One of the great advantages of Adsense is that you can make money without making the sale.

    I am very interested to see where this will head later on.

    Matthew Glanfield

  8. Something needs to be done about Google. They are going to be the next Microsoft before you know it.

    I is scary how many things they have to put in your computer…

  9. I think it would be interesting to see a Pay Per Sale model come out. It may eliminate click frauds, but I’m guessing that if they do the PPS model, it could cost publishers even more. I suppose their are advantages and disadvantages if we look closer, but if they offer both PPC and PPS, that would be interesting. I don’t know how they would do it, especially since publishers may be reluctant to it due to the earning aspect.

  10. PPC is a big looser for large ticket items like we sell. We sell medical products for the disabled. Most of the people visiting our site are using it for a catalog never intending to buy. I think there us a lot of waste and fraud with pay per click for many products and services on the web effecting a large percentage of companies. Google and Yahoo are aware of this they have the data and have not released this data to the customers. If they did people would not even try PPC for many products people are trying to sell on the web. I also think the word is getting out on this and will soon shock the PPC biz and the big search engines. Pay Per Sale will save google and yahoo and others will follow. The big lie is now being exposed for many of the advertisers. Thank God!

  11. PPC is getting so expensive now that many website owners are resulting to having to revisit their websites and really optimize
    their sites, and with the pay per sale
    model, it wouldn’t make much sense for
    website owners to dabble in this arena
    until they highly onpage optimize their sites but more importantly optimize their sites off page. Then and only then
    once owners have their site off page
    optimized and have very targeted traffic
    to their sites, then they should consider the pay per sale model as the
    traffic now coming to their sites is
    extremely targeted and ready to buy
    provided the website is set up as a
    selling machine.

  12. Google is taking over the world, check out Business Week April 9th issue. Best to play the game with them, instead of against.

    Briana

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