Talking tech since 2003

The email below (originally posted on Blogoscoped) describes a new advertising program Google will be trying out with a select number of advertisers.  It also appears the Wall Street Journal confirmed this story on Friday.

We are pleased to invite you to participate in an exciting beta program with the Google Affiliate Network to show product ads on Google. Product ads are paid product listings that appear when users search for products on Google. Through participation in the Google Affiliate Network product ads beta program, you can promote your products to users actively searching for your products and pay only when users make a purchase on your site.

This opportunity is a very tangible benefit of the integration of our affiliate platform into Google. Google is constantly experimenting with new features and visuals to improve ad effectiveness and advance the end user experience.

Google product ads will feature product specific information directly in the ad such as price and product image. During the beta program, Google will be testing to identify the most effective ad formats. Google product ads will complement standard text ads on and will run independently during the beta. All reports on the performance of Google product ads can be seen through your Google Affiliate Network account.

The Google product ads beta program relies on your Google Base feed. Minimum pricing is your standard publisher rate, plus the network fee. To maximize your competitiveness among advertisers participating in product ads, you are encouraged to increase the CPA rate for your product ads relationship.

The product ads are unlike the traditional ads (text/image ads), the advertisers in this program will bid on the commission they wish to pay Google for actual sales that occur on the advertisers website, rather than what they want to pay when a potential customer clicks on that ad.

These new ads will not replace the current text ads that have generated billions of dollars for Google in annual revenues every year, however, they are simply another way for Google to continue to grow and monetize. In this tough economic time it is important that company’s find multiple revenue streams. Google has definitely looked for numerous ways of generating more revenue streams aside from typical Adsense text/image ads. In addition to the latest announcement of Google Product Ads, Google also recently began to offer a place to park domains and make money through Adsense while the domain is parked.

Overall, this should be an interesting experiment for Google. I’m curious to know how well they convert. I’m sure they believe their conversation rate will be rather high (as do I) being that a lot of people will search for a product through Google, find it, and purchase it. This program (if successful) could potentially turn into one of the largest affiliate programs on the Internet (if not the largest) assuming of course they eventually make it available to publishers through the Adsense program.

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