Product Listing Ads. The Battle lines are being drawn.

You may not have noticed the rather low key announcement from Google this week but it signals a significant step in Google’s strategy for continued dominance on the Internet.

I’m predicting the start of a revolution in advertising on the Internet in the coming year. In fact it will seem more like a war than a revolution.

Google can see it too and they are taking steps.

Their announcement this week was for the release of Product Listing Ads.

This allows users with a Google Merchant Account to serve up product ads on the Google Search network.

The ads look like this:

There are two very strong hints here as to Google’s direction.

1) Image ads are going to become more prominent now. I think the days of text ads are numbered. Google’s competition isn’t going to come from Bing. I think they will get more competition from Facebook and MySpace. Those are highly visual websites that will develop their use of image ads significantly.

2) These new ads from Google rely on CPA (Click Per Action). This is where the advertiser will only get charged if their ad is clicked on AND the visitor makes a purchase.

This second point is very interesting. If, like me, you focus your advertising around getting the conversion rather thane getting the click then CPA could be a good thing. Although I do hope that Google will base CPA around an action rather than just a purchase otherwise those people who build email lists might find the new direction a little challenging.

If you want to see the full announcement from Google, it is here:

Inside AdWords: Announcing Product Listing Ads

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