netmeg - 9:10 pm on May 12, 2010 (gmt 0)
Well... for some time we advertisers have been able to bid on a cost per action basis rather than CPC. If I decide that a lead is worth $15, for example, then I tell AdWords Conversion Optimizer to optimize for that, and it does.
Works better for some campaigns than others. But it's nothing new, been around for a while.
What they did change just recently is that previously an advertiser could specify the maximum cost per action (or acquisition), but now we can specify the AVERAGE CPA we want to target instead.
Haven't gotten around to trying it yet myself.
As far as I know, the publishers still get paid for the clicks. It's just that if I specify $15 for a conversion, Google knows it is supposed to send me a conversion every $15 worth of advertising or so.