Google announced a limited beta test of pay-per-action advertising, a new pricing model that allows advertisers to pay only when predetermined actions are completed on their site. The pay-per-action model gives advertisers the option of paying when a customer makes a purchase, signs up for a newsletter, or completes any other clearly defined action the advertiser chooses. Advertisers have the freedom of defining the value of a completed action, ultimately giving them more control over their advertising costs.

Pay-per-action ads are only shown on Google AdSense for content sites. AdSense publishers are able to choose whether they want to serve pay-per-action ads on their sites. Publishers can select between an individual ad, a shopping cart of ads, or a specific term or phrase that is relevant to their site’s content. Prior to ads being shown on their site, publishers can view the specifics of the ad, including company name, logo and products or services being sold. This visibility provides publishers with control over which pay-per-action ads are shown on their site.

With this new pricing model, advertisers can create text or image ads in addition to using Google’s new text link ad format, which are brief text descriptions that take on the characteristics of a publisher’s page. Pay-per-action advertising is available to U.S. advertisers. Over the next few weeks, Google will begin adding advertisers and publishers to the beta test.