This Article is an excellent summary of the wisdom of crowds idea and of several online projects trying to leverage that wisdom in practical or profitable ways.
… fewer ads mean less revenue SHORT TERM. But long term the advertising revenue actually goes up. Why? They found their users started trusting the advertising more and were more likely to click on ads.
This is possible but seems unlikely. Heavy users are generally going to want a bunch of ads to quickly scan because Google context matching and user queries are usually not specific enough to come up with the “right” ads.
Revenue per click goes down as you add more ads at lower per click rates so it complicates things as well, but I don’t get the ‘trust’ factor cited by Robert – it just does not make sense to me that Google is effectively training people to click on ads more often by offering fewer ads.
Maybe I’m missing something in this case, but these trends are huge because online advertising is arguably the most significant change in the landscape in decades, and thanks to having accurate conversion measures we are going to see a huge shakeup in the ad world. That’s a very good thing in an industry that is, to a large extent, based on either misleading people or, at the very least, changing their behavior opportunistically.