Tonight at Jeff Pulver’s awesome party I met a Google employee who I’ll keep nameless. He works closely with the advertising team and found it interesting that I noticed that Google is putting fewer advertisements on each page than its competitor.
For instance, do a Google search for:
San Francisco Sushi.
You’ll find two ads along the top, and three along the side. In a second search I did, the ads on top disappeared and there were only five ads along the side.
There used to be more, the Google employee told me. But, he said, Google has done a lot of research with users and found that 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.
Let’s compare. Let’s do the same search on Live.com. There’s three ads on top, vs. Google’s two and five ads along the side vs. Google’s three.
That’s three fewer ads to click on. But look again at the ads. Which ones are more relevant to the search? One ad, on top, is for the InterContinental Hotel. What, again, does that have to do with Sushi? Another ad is for “free online coupons.” Sushi? I see noise, not good sushi results.
Let’s head over to Yahoo. For the same search on Yahoo I see two ads on top and a whopping eight ads along the side. That’s twice the number of ads that Google has on that page. Damn, Yahoo should be raking in the revenue!
Problem is, the more ads you put on a page, the less they’ll actually work according to Google’s internal research. There’s an ad there for “San Francisco Boutique Hotels.” What does THAT have to do with sushi?
Anyway, Google is doing that to make way for its new “pay per action” advertising type (announced yesterday). This is brilliant. Advertisers are going to LOVE this. Imagine I ran a print shop, like PrintingForLess. Now I could tie my advertising onto actually getting a sale, or getting a good lead. You see why Google needed more relevant advertising before turning this on. They want only potential buyers to see an ad. Anything else is noise. Noise reduces buying behavior.
The thing I’ll be looking for is the next quarter’s financial results. I wonder how big a short-term hit Google will take for displaying fewer ads. I doubt it’ll be big. But long-term you can see where this is going.
Google’s pages look cleaner, more relevant, advertisers are happier (fewer accidental clicks that they have to pay for), and it sets the stage for the new pay-per-action plan.
Oh, and thanks to Jeff Pulver. I hung out with him most of the day and he puts on an amazing event.