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Friday, September 03, 2004

Ubiquity for 'Ads by Goooooogle'

Google's now allowing its AdSense publishers to place up to three ad units on a page. (Since any given Google AdSense ad unit can contain multiple ads, you're looking at up to twelve AdWords advertisers on any given page of content.)

For advertisers using content targeting, this means they'll need to monitor their spend on this advertising more carefully than ever. Those who have suffered with lower click volume than they'd like will see a welcome increase. This is also going to be welcomed by agencies, who have been having difficulty justifying their helping presence at lower spend levels.

For Google, the impact is fairly straightforward. Critics will say that this kind of advertising "isn't search." Analysts will want to consider the strong possibility that this continued rapid growth will mean Google's cash flow will be nothing short of rampant in Q4. Critics and analysts... all in a day's work for the Mountain View Megacorp.

The type of incentive structure and economic impact of this change on publishers would be the subject of a separate, longer study. Probably the answer isn't simple or straightforward. Ultimately it depends on how well Google "pays out." They continue to compete with Overture and others for quality publisher partners. Because some publishers have difficulty qualifying for inclusion in these networks, it won't necessarily place much downward pressure on Google's and Overture's revenue shares.

The move to allow three creatives on a page, above all, is likely an attempt to prevent leakage of smaller publishers who would experiment with a second-tier ad network if Google's conditions continued to be restrictive.

And finally, because so many of the pages that are serving AdSense creative are pages that rank well in the Google index, Google has managed to maximize revenue from clicks on its non-paid index results. In short, they get you coming and going.

Posted by Andrew Goodman




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