The arrival of the Google Affiliate Network, aka a rebranded Performics product, represents the search advertising company’s newest area of focus. Such a shift apparently means moving resources from elsewhere, with the AdSense Referral program a casualty.

Google announced the retirement of AdSense Referrals on the Inside AdSense blog, pegging an end date for the last week of August. They are promoting the Affiliate Network as a replacement, or AdSense itself if a site has less than three AdSense units on a page.

Site publishers will want to make sure they have all of their referral reports stored away safely, and that referral code gets removed before the end of the program.

Google also disclosed the end of the Pay Per Action beta, again with the Affiliate Network suggested as a replacement product for advertisers. They also recommended their Conversion Optimizer as a way to manage those cost per acquisition ads placed on Google’s networks.

All Of AdSense Gains Referrals 2.0

Referrals works a little like pay-per-action, by Google’s description. Publishers picks the ads they want to display, and when a visitor clicks the ad and performs a specified action, the AdSense publisher gets paid.

The new version, Referrals 2.0, should improve upon the beta version.

Benefits of the new version of Referrals will have an expanded product inventory to aid in the selection of ads that fit the publisher’s site. There will be an option to refer products by category and keyword. AdSense does the work in selecting ads to display.

That also comes into play with ad unit optimization. When creating a new referral ad unit and selecting the ‘Pick best performing ads’ option, AdSense will look for the most relevant choice of ads that should perform best on the site.

A significant difference between referrals and typical AdSense units comes from the policy side. While making any reference to regular AdSense ads violates policy, site publishers are free to highlight and promote referral ads.

Google Pay-Per-Action Goes Global

Pay-per-action (PPA) is a pricing model where advertisers pay only when a conversion has taken place on their site, such as when a user makes a purchase or signs up for a newsletter.

"Pay-per-action advertising helped our company make the most of our marketing budget," said Alexandre Douzet, Executive Vice President and General Manager, TheLadders.com.

"At TheLadders.com, we are big proponents of marketing efficiency, so the ability to supplement our existing cost-per-click campaigns with a model that rewards qualified leads makes a lot of sense to us."

Beginning today, advertisers in the beta will receive an alert in their AdWords account telling them that they can create PPA campaigns. Advertisers who have AdWords conversion tracking and have more than 500 conversions in the last 30 days will automatically be added to the beta on a rolling basis.

PPA ads only appear on sites that participate in Google’s content network. They will not be visible on Google or in its search network.

Publishers in the Google content network that want more control over the ads displayed on their sites can choose individual ads, a shopping cart of ads or a keyword that is related to the content on their site.

Google Whispers More Details About PPA

Since last week’s announcement that Google would start offering AdWords PPA ads, where the advertiser pays only when a predetermined conversion has taken place, plenty of buzz has swirled around the plan.

A lot of that buzz has focused on a few distinct questions about PPA on AdWords. The Inside AdWords team at Google posted answers to some of the more frequently asked questions they have received about the plan.

International advertisers will have to wait to participate, as Google has opened this limited test only to US-based clients. Advertisers must have a billing address in the United States, so even if an international business focuses on US customers, that isn’t enough to be eligible yet.

PPA ads only show up through being displayed on sites that participate in Google’s content network. They won’t appear on Google or in its search network.

An advertiser concern of content networks has been the prospect of being displayed on less than desirable partner sites. Since the condition of PPA requires some kind of conversion to take place, typical worries about click fraud with pay per click ads should not be a problem.

On the content network side, AdSense members can sign up for a referrals program. Search marketers managing clients through the AdWords ‘My Client Center’ product can select individual accounts to participate in the PPA beta.

The fixed rate provision of PPA through the new program probably won’t change in the near term. Some advertisers had asked about paying the PPA as a percentage of a sale, but Google is only doing the beta with a fixed price as the cost of conversion.

Got a tip that’s too hot for the comments section? Email me, dutter at webpronews dot com.

While the in-text ads like the one IntelliTXT offers and Google appears to be offering look similar in format to Snap‘s preview bubbles, Paul Angles, Snap’s marketing director, points out that there are no ads in those little pop-ups.

These content previews have been met by the blogosphere with mixed reactions. Bloggers such as Michael Arrington and Guy Kawasaki both use Snap on their sites. Robert Scoble tried it out, but the flurry of negative comments about it may have moved him to quit.

"Yes, some people still don’t like us," said Angles. "But a lot more people tell us that they’re frustrated with sites that don’t have it."

Regardless, Snap is not the same as IntelliTXT. "Snap.com does not deliver in-content ads," he said. "Our preview bubbles give users valuable information about what a link points to. That’s it. No ads."

Angles was also sure to let us know that Snap would be releasing a major upgrade to its product at the Web 2.0 Expo in San Francisco next month and that Snap.com has offered Pay-Per-Action search since May of last year. 

Click fraud? It shouldn’t be as big an issue with pay per action. If an AdWords advertiser sets up the latest method offered by Google to kick in when a purchase takes place, it’s hard to imagine fraudsters providing their credit card numbers and addresses to the business.

The debut of pay-per-action from Google addressed the basics. A Google product manager for the new product discussed the basics of the latest service on an Inside AdWords blog post.

A new text link ad format emerged as part of that discussion. The pay-per-action FAQ described the format:

What is the text link format for pay-per-action ads?

Text links are hyperlinked brief text descriptions that take on the characteristics of a publisher’s page. Publishers can place them in line with other text to better blend the ad and promote your product.

For example, you might see the following text link embedded in a publisher’s recommendatory text: "Widgets are fun! I encourage all my friends to Buy a high-quality widget today." (Mousing over the link will display "Ads by Google" to identify these as pay-per-action ads).

Though the maximum length of a text link is 90 characters, we’ve found that shorter links perform better because they allow the publisher use the link in more places on her/his site and in different context. The maximum length is 90 characters but less than 5 words is best. Even better, just use your brand name to offer maximum flexibility to the publisher.

Google’s pay-per-action could have an impact beyond just the advertiser/Google relationship. Andy Beal suggested that the new plan is a "clear threat" for affiliate marketing networks:

Google, for all intents and purposes, has just entered the affiliate marketing arena, with the battle cry that they can do affiliate marketing better than the affiliate networks can.

Now, I feel obliged to inform you that when I posed this suggestion to Rob Kniaz, product manager for Google’s advertising products, he was very quick to deny any intention to compete in the affiliate network space. “We think this is different from the traditional affiliate marketing industry”, said Kniaz. “[It’s an] extension of the current AdWords product”. Oh really? Kind of like how Google doesn’t see itself competing with Microsoft’s office suite.

When I pushed Kniaz to explain why Google is so keen to distance itself from any associations with affiliate networks, his response was that the new PPA platform offered “more automation, more options, more control” than affiliate networks.

Did Google just slip into Commission Junction’s HQ with a silenced pistol and a license to kill? Your comments are welcome below this post.

Yep, after years of hinting, Google is finally ready to let us test their platform on a CPA (cost per action) model. (If this sounds familiar, reports surfaced back in June, that Google was offering a limited test of CPA)

The beta test is restricted to AdSense for content in the U.S., will run separate from the regular auction model, and you may not even get a chance to test it for a few weeks, while they roll it out. That being said, this is a significant expansion of the CPC (cost per click) model, with advertisers being given the option of paying when a customer buys a product, signs up for a newsletter, or completes any other actionable task on the advertiser’s web site.

On the publishing side, AdSense publishers will be able to opt-in to display PPA ads from Google and even whether they wish to display a single ad, a cluster of ads or match to a specific keyword that is relevant to their page content. Publishers also get to preview the ads, including company name, logo etc, before the ads go live.

As the broker between the advertiser and the publisher, Google will take its cut of any incentive offered. For example, if the advertiser offers $2 per sign-up, the publisher may see only $1.50 offered for the same sign-up. Google will pass on to publishers the net-incentive only.

Publishers also get a new “text link ad” format (I wonder what Gavin will have to say about that), which allows them to display JavaScript ads that appear as a single text link. Publishers will be able to search for text link ads that match their chosen text string. Perfect for bloggers looking to monetize their site, but would prefer to add embedded text links, rather than whole blocks of ads.

Now, here’s where my post title comes in to play.

A platform that allows advertisers to offer a reward based upon a sale or sign-up?

A platform that allows publishers to select text, flash or images when displaying advertisers incentives?

What does that sound like to you?

To me, it sounds like a clear threat to the likes of Commission Junction or LinkShare – or any other affiliate marketing network. Google, for all intents and purposes, has just entered the affiliate marketing arena, with the battle cry that they can do affiliate marketing better than the affiliate networks can.

Now, I feel obliged to inform you that when I posed this suggestion to Rob Kniaz, product manager for Google’s advertising products, he was very quick to deny any intention to compete in the affiliate network space. “We think this is different from the traditional affiliate marketing industry”, said Kniaz. “[It’s an] extension of the current AdWords product”. Oh really? Kind of like how Google doesn’t see itself competing with Microsoft’s office suite.

When I pushed Kniaz to explain why Google is so keen to distance itself from any associations with affiliate networks, his response was that the new PPA platform offered “more automation, more options, more control” than affiliate networks.

Sounds like fighting words to me!

UPDATE: You can view more details of PPA here.

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