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Google's new advert charge: Pay what they see

Friday, 13 Dec 2013 | 5:24 AM ET
Justin Sullivan | Getty Images

Google has announced that it will begin charging advertisers only for ads that have actually been seen by web-users.

The change in policy, the first such move by a major online ad network, will affect more than two million sites in the Google Display Network and is part of what Google said was an "important step towards this goal by making it possible to buy based on viewability."

James Beser, Group Product Manager at Google, wrote in a blog post, "Making viewability a basis for buying, selling and measuring media can help transform the digital marketplace. With access to more meaningful metrics, brand advertisers can unleash their most creative campaigns, knowing they'll have a chance to shine."

(Read more: Google's new plan for endorsement ads is all about your info)

The algorithm used by Google will only show ads that are most likely to be viewed by a web reader. Furthermore, the advertiser will only be charged if 50 percent of the ad is visible on the page for one second or longer.

According to Publicis' Zenith Optimedia, television's hold on the global advertising market is set to fall in the next few years. Television will capture 40.2 percent of the $532 billion market in 2013, but this will shrink to 39.3 percent by 2016.

(Read more: Move over Don Draper, Google is advertising king)

In contrast, the internet will ad market will grow from 20.6 percent in 2013 to 26.6 percent in 2016. Still, digital marketing is not a major part of some advertisers' budgets, perhaps in part due to the inaccessibility of many adverts, with internet consumers sometimes having to scroll all the way to the bottom of a webpage to actually see an advert.

As Google's Beser wrote in his blog, "Even the jingliest, jolliest ad of the season can't work its magic unless it gets seen."

Just this week, New York Times CEO Mark Thompson said he would push to increase the company's digital advertising revenue next year after it fell three percent in the third quarter this year, a greater decrease than print ad revenue, which fell 2 percent.

(Read more: Inside the mind of Google)

Google added that it would continue to monitor the ad system: "We'll continue to work with our partners in the months to come to make this a reality, and to ensure that every ad has a chance for its holiday wish to come true," the Google blog said.

—By CNBC's Kiran Moodley. Follow him on Twitter @kirancmoodley

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