Google's latest announcement that they will start testing cost per acquisition (CPA) advertisements has perked up the ears of the affiliate community. David Jackson appears to be the first to layout the Google CPA plan by which Google will start testing some CPA ads on publisher's sites, thereby paying the publisher not for the click, but only if the desired action takes place once the ad is clicked. This could be a sale or a lead form fill in. David Jackson has labeled this as a ValueWeb killer.

Sam Harrelson on ReveNews doubts this will mean the end of ValueWeb's CJ unit. He thinks this is just another indicator that the lead generation business is "red hot".

Jeff Doak, also on ReveNews concurs with Mr. Harrelson, and thinks this is far from the beginning of the end for CJ. "Affiliate marketing isn't about dynamically generated text links on content sites, it's about clever publishers who figure out new ways to drive converting traffic." says Mr. Doak. "Affiliate marketing is about relationships, and there is simply no relationship here." He thinks Google makes too much on PPC to risk it on CPA deals.

Scott Jangro writes, "The smaller CPA networks also have to be concerned, though they can surely compete on price. Google, like any large company, will be bogged down in policies and accounting that will probably make it difficult for them to compete with the creative and nimble CPA networks at a pricing and service level."

Personally, I see it as an interesting development in the ever changing landscape of search marketing. Google has constantly gone after new ways to make more revenues. Surely that see their PPC ads being used to generate large volumes of CPA deals, and they have raised the advertising rates under the guise of "page value rankings". This is just one more step in the direction of opening up the lucrative CPA money to Google.

Another thing to note is that Google has probably woken up to the fact that their contextual advertising model is a little broken. By opting advertisers into contextual advertising as a default option, they have exposed their advertisers to click fraud, and non performing traffic. In this industry Google only wins if the publishers who host their ads and the advertisers who pay for those ads make money. For some time we have seen publishers happy with AdSense ads that pay them for each click, but more and more advertisers are waking up and seeing that these ads just don't convert and are not worth the money they are paying for them. Perhaps a move towards CPA is a move towards helping to make these advertisers a bit more open to considering these networks since it would reduce the risk of paying for non-converting traffic or worse, fraud.

Right now it is a limited test, I think the interesting part will come when they start showing how they will be allowing advertisers to purchase these ads and how they will track those conversions. That might open up some interesting opportunities for smart affiliates who are able to create deals with their merchants to host the Google tracking codes on their conversion pages or allow their affiliates to capture the leads on the affiliate sites and then pass the leads.

Additionally, publishers may now have another revenue making option to test on their sites. AdSense has proven to be a money maker for many sites, and these CPA deals from Google might make sense too if they are simple to implement and auto-optimizing to maximize your revenues.

Keeping up with the changes is part of the challenge, and part of the fun!