Google Adwords Launches Product Listing Ads and CPA Revenue Model

Yesterday, Google AdWords announced its Product Listing Ads feature is now available for all U.S. advertisers. According to the announcement on their blog, Google has tested this feature for a year in beta, with “hundreds of millions of products” and found “that people are twice as likely to click on a Product Listing Ad as they are to click on a standard text ad in the same location.”

Product Listing Ads are similar to Product Extensions in that they show pictures and prices of your products linked to your Google Merchant Center. However, Product Listing Ads are triggered by searches matching an item as opposed to keyword or ad text. Additionally, Product Listing Ads offer Cost-Per-Action (CPA) feature in which marketers don’t pay for clicks, but instead pay when a purchase is made through a revenue share with Google.

Conveniently launched prior to Cyber Monday, this will be an interesting feature for marketers to experiment with and to measure the CTR and ROI against other campaigns.

The CPA model is a fairly dramatic departure from Google’s advertising revenue model. What do you feel the impact will be to the SEM space in general and to marketers individually?