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Google Creates Separate PPC Marketplaces for AdWords and AdSense
There is no need to review the fact publishers earn huge profits from AdSense. However, what I can say is AdSense is, at times, not as profitable as ads on search sites for advertisers. I’ve heard advertisers say this over and over again. Personally, I’ve always thought that the PPC of the search sites (AdWords) has subsidized the payouts for content sites (AdSense) because the combined market keeps the revenue from AdSense artificially high although this is just a guess.
Last week, Google quietly begain separating content site bids from search site bids.
Google would not have done this, if the search mammoth did not think it would earn more from creating two distinct marketplaces: one for AdWords and one for AdSense. I bet Google is counting on PPC prices increasing when advertisers can separate the costs and back out the true ROI of each search channel.
However, what will happen to AdSense prices? Perhaps AdSense works better for some advertisers and nothing will change, but perhaps not. Time will tell.
This does make one wonder what will happen to the eCPC of AdSense for publishers and how that might impact the pay for performance landscape.
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While I think Google makes many decisions putting profit ahead of all else (like getting into businesses it knows nothing about… demonstrating to investors that it is in “growth mode”, yada-yada) I don’t think it does everything (i.e. this change) to enhance profits.
Google, as an example, constantly invests in cleaning up its index and AdWords user experience. Why? Because they think they can make more cash or because they still value user experience? They believe some things are core to their success - like keeping advertisers and users happy. As I see it they did this for similar reasons.
From a business logic perspective it also makes sense. We here at Revenews (and advertisers as well) have agreed that the clicks garnered from each type of buy are radically different in terms of clicker intent (active search vs. curiosity). To offer each jointly makes little sense from an analysis and operational perspective.
Might check your history… Yahoo/Overture did quite well in seperating their content and search site ads.
Beth