diberry - 6:52 am on Dec 15, 2012 (gmt 0)

@diberry, how could Google be "feeding the best traffic to the sites that pay for Adwords". That is, what mechanism could guarantee that "the best" SERP users click on an ad rather than an organic result?

You're right, they can't control what we click but I think they can nudge us in certain directions. But let's say I bid for "red widgets", and Google can tell I'm selling red widgets not just presenting info about them. If it can separate the buy searchers from the info searchers and just show my ad to the buy ones, chances are I'll get some conversions (while someone else gets nothing but info searchers to their ecom site).

I'm sure they could probably get a lot more specific than that - I bet through their services, they've got a lot of searchers thoroughly profiled. Another possibility is localization. What if red widgets sell far better to people in Kansas than anywhere else in my selling area? They could set something to make sure my ads for red widgets gobble up plenty of exposure to Kansas IPs.