Wall Street Journal:

The company’s new pilot program involves AdWords, its biggest advertising program, in which advertisers place links next to Internet-search results. Google gets paid when users click on an ad and visit the advertiser’s website.

But while tracking clicks is an effective way to measure a Web ad’s impact on online sales, the system breaks down when shoppers enter a physical store, where their behavior is harder to monitor.

“Clicks are just the beginning, and everyone knows that there’s more value to tying ads to purchases,” said Benny Arbel, chief executive of myThings, an advertising-technology company that works with Google but isn’t involved in the pilot program. “If Google can demonstrate that people did not just click on an ad but that they actually bought something, that is the Holy Grail.”

This will mean a big new source of revenue for Google and a wealth of new data they will be able to collect about their users’ habits.