Google Advertising Rumor

I really appreciate Robert Scoble‘s great insights but I’m skeptical of the party rumor he cited today that suggests this about Google Advertising:

… 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.

About JoeDuck

Internet Travel Guy, Father of 2, small town Oregon life. BS Botany from UW Madison Wisconsin, MS Social Sciences from Southern Oregon. Top interests outside of my family's well being are: Internet Technology, Online Travel, Globalization, China, Table Tennis, Real Estate, The Singularity.
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2 Responses to Google Advertising Rumor

  1. Fools Gold says:

    It might simply be that by offering fewer ads they are clearly offering fewer absurdly irrelevant ads and that this creates a sense of improvement in the viewer.

  2. JoeDuck says:

    Hmmm – good thought Fools Gold. Improvement is a relative thing.

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