OfferMobi is claiming to be the first to sell cost-per-action ads on mobile devices - a format that has long intrigued media buyers with its clear value of only paying when a consumer makes a purchase. Advertisers, though, have been leery of the model, fearing it could lead to diminished revenues.

So far, according to OfferMobi's head Mark Roth those fears haven’t been realized. "We've already got revenue. We've got traction. We have got people converting (on ads) every day." (via Investor’s Business Daily). OfferMobi reached 150,000 ad clicks in a single day, he said, via small graphical ads and text-based ads. The company has about 60 advertisers, in the marketing, entertainment and education industries and more than 6,000 web publishers that carry its ads and get a percentage of the revenue. The ads also appear in mobile apps.

Other Success Stories

There is other anecdotal evidence that CPA can be a winning strategy – even if it must be tweaked a couple of times. For example, Goodway Group, a marketing services company that owns and operates three ad networks, recently reported that its Effective Costs Per Actions, or eCPAs, have improved on many campaign after it integrated NetAcuity Edge's ZIP code data within its ad servers to offer deeper and more accurate IP-based targeting to its clients.

Google Pushes the Model

Then there is Google, which is testing a service in which marketers pay only for ads that have been acted upon by consumers - such as a purchase or registration on a web site. Early adopters have reported that the model, which would apply to both search and display, brings in greater revenues than the pay per-click format.

Google has also enhanced a mobile local ad product with new functionality – and a CPA model. The product lets marketers embed maps within expandable ad units, and then target the ads according to a customer's immediate location. When the ad is expanded, it pinpoints the business' location on a map along with a click-to-call phone number and an option to ask for turn-by-turn directions. Advertisers are only charged when the business is called or its website visited.

Industry Wide Adoption?

But are these one-off initiatives enough to support a wider trend? Some industry watchers think it will be successful in certain markets – especially among local advertisers who tend to be mom and pop stores marketing to nearby consumers. Also, the industry can expect pushback from companies that benefit from the pay per click model, says RealVu Executive Vice President Alan Edwards. "The publisher's responsibility is to bring eyeballs - i.e viewers. Publishers want to be paid when the ad is viewed. Whether the ad is clicked or other action taken should not be their concern."