RevShare on Tuesday said it raised $20 million in a first funding round, underscoring interest in its “cost-per-action” TV advertising model that promises better results than traditional ad schemes.

The move toward more sophisticated ad tracking on TV has not gone unnoticed by search advertising giant Google. The Internet ad juggernaut is now piloting its own program to place TV ads. But RevShare, formed in 1989, so far has a solid head start on Google.

“In the past couple of years, the technology has advanced to the point where we have eyes and ears to track the return on investment and give that data to advertisers,” RevShare CEO Joseph Gray said.

The Temecula, California-based company places ads—which are bought using an auction model—for its customers on its network of more than 1,500 local TV stations, cable systems, syndicators, and national networks. These advertisers only pay on the “actions” generated, such as a call to a 1-800 number, a web site visit, or a sent mobile text message.

The approach is similar to the cost-per-click method of web advertisers and is a sharp change from traditional “cash buys,” where an advertiser pays based on the projected audience size of a particular time slot.

Frank Stiner, head of marketing for tax firm Advantage Tax Resolution, is a believer in cost-per-action measurement. His company has been using RevShare for two years to place TV ads.

“It is much more cost-effective for us because we only pay for what comes into the company,” he said.

Internet giant Google launched the trial version of its Google TV ads this May. Google TV ads, which are currently run on one national network and a local San Francisco Bay Area cable channel, are priced based on the number of impressions an ad gets, as measured by TV set-top boxes.

This approach more closely follows Google’s highly successful AdWords and AdSense models for pricing advertising.

But RevShare doesn't only have Google to worry about. The move to more sophisticated ad measurement is being pursued by Hawthorne Direct and Backchannelmedia, which take similar approaches.

Despite the recent rise in Internet advertising revenue, TV advertising is still the golden egg. TV advertising has reached $46.4 billion in the United States alone through September of this year, according to TNS Media Intelligence. Still, worldwide Internet advertising was just above half of this figure, or $26.6 billion, for all of 2006, according to Oppenheimer.

With such a large market to tap, companies that deliver targeted and sophisticated ad options for TV advertisers stand to gain enormously. RevShare said it has so far pulled in more than $57 million in sales for 2007 and that the company is profitable.

Mr. Gray said RevShare would use the $20 million investment, which was led by The Carlyle Group and H.I.G. Ventures, to further develop its technology and expand its advertising, sales, and marketing efforts.