Google announced two new additions to Adwords. 

The first new addition is their new “text link format” ad unit.   The new ad unit is ad that appears inline with your text.  It means that you can now place ads right into the middle of a sentence on your page, instead of off to the side.  This makes them appear like regular links. The only way people know they are a Google advertisement is the addition of the hover-text, “Ads by Google”, that is displayed when you mouse-over the link.

As a publisher, you no longer have to litter your site with those big, obvious Adsense ad units. Instead, you can simply embed ads directly into text in your content.

As an advertiser, you can create this new type of ad and provide default text to be used as a text link. Google suggests keeping them down to 5 words or less or to use your brand name, which offers maximum flexibility to the publisher displaying the ads.

The second new addition is the main focus of their announcement. They are introducing pay-per-action in addition to the existing pay-per-click model.

With pay-per-action, we only pay when the visitor has completed some kind of action… like opting into our list.   So now, instead of paying for tons of clicks that don’t result in anything, we can choose to only pay for solid leads.

In contrast to paying for clicks which may or may not convert into leads, this is a much more predictable model.

These are both in beta testing and there are requirements to get in. Read their announcement for more details.

Thanks to John Reel for highlighting this