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The CPM rather than CPC aspect is interesting. Looking forward to investigating this further.
I can see this hurting AdSense revenues if advertisers switch to this new system and then disable the content ads. This seems quite likely to happen from the little information currently available but there are still a lot of unanswered questions....
My question is whether or not AdSense sites can control whether a graphical ad appears or not. I would think that graphic ads can change the look of a site in ways that some site owners would not like.
This seems on the surface to appeal more to people not using Adwords at all... moreover, lazy ad execs who want to do a mass network buy with a banner campaign and call it quits at the end of a day, whether it drives sales or not... but wait, their banners won't get into rotation if they DON'T have a minimum click-thru rate, will they? Hmm.
Gives you some idea on what web sites your content ads are on. Be prepared for some surprises. ;)
The fact G went with CPM over CPC for site target is going to create a lot more math for companies to determine positioning and effectiveness. The publisher advantage (at least for premiums I'd think), is that they'll get paid no matter what - if clicks don't occur, Google still was paid by CPM, so presumably, so will the publisher.
The downside is this is no longer paid traffic. It's banner displays. The upside, if you get a 10% CTR, you're still only paying CPM.
This seems to really have a few major implications in the advertising world.
Creating product awareness
Launching a new product to create 'awareness' has always been difficult todo with AdWords. You can't launch a product no one is searching for via keyword targeting. You can find ancillary keywords, but creating the awareness through search has been difficult. Now, you'll be able to launch those products with centralized CPM reporting akin to advertising.com or any one of the other multitudes of CPM serving companies.
One now has to set up their conversion tracker to pull impressions and clicks to determine conversions by CPM. There are many ways to break down CPM to CPC for apples to apples comparisons, and many tracking systems will find their own ways to create these conversions numbers and many will be non-standard for a while. On that note, the screen shot doesn't include the Google conversion counter. Strange that they wouldn't include that feature to work with the CPM ads.
Where to buy the distribution:
I've had CPM deals with companies that run AdSense. There is always a lot of math involved as to which ad serving worked better on the various sites. Now, will some of these publishers lose their large CPMs for ad formats and show more Google ads? This will be an interesting development to watch from many of their premium content partners.
From a Search Company to Ad Distribution Company:
This is a move many have wondered about. The moving of Google from a search company to an advertising distributor. In the past, it could be argued each way, however, this is a move that makes them appear more to be an ad serving company. While contextual could be argued that it used search technology to understand a page's themes to serve ads, this is a model of just centralized ad serving.
From Keyword to Themes
This also shows that Google is indexing sites by keywords/themes. I've made many arguments that Google moved to a themed keyword system for keyword placement a while ago (the fact that the keyword 'real estate' will never show for 'real estate photography' because they're different themes) seems to be a reality with the tech behind these options.
In the CPM world, the 'above the fold' aspect creates a higher CPM than 'below the fold' placement.
There doesn't seem to be any way to choose one ad unit over another, just the site in general.
Will publishers lose their incentive to 'mask' the ad units for higher CTRs or keep these units 'above the fold'.
Will publishers have their PPC paid listings at the top of the page, their CPMs at the bottom of the page, and yet, the advertisers doesn't know which unit is which?
Some ad serving companies (especially when buying 'buckets' of CPMs and not each individually) have created a world where the publisher put these 'guaranteed' CPMs lower on the page in favor of custom deals or PPC ads at the top of the page.
Wonder how these issues will be dealt with.
Multiple ad units on a page is a complicating factor for Google, but I can't think of any way a publisher could use that to game the system to their advantage.
A few observations:
-- This is gonna go a long way towards killing AS scraper sites.
-- Quality mid-tier sites in categories that previously benefitted from Big Adversier ad dollars will feel a slight pinch, but nothing like the pain that the scapers will feel (the Big's will opt out all over the place, just as they do in other media arenas, where they don't just buy audiences; they buy properties).
-- Remains to be seen, but in theory, no reason that the CPM model should hurt rev's from pages that were getting good eCPM's from CT's ... except in those cases where savvy mid tier advertisers squeeze onto sites that they were not finding before, taking advantage of related content to hawk their wares. ;-)
-- This will be a HUGE boon to savvy mid-tier players with the resources and knowledge to find the sites that the big boys are uncomfortable with, that nonetheless make tons of money for their advertisiers.
-- IMO, quality mid- and small-sized sites will gain more from this over time than may be readily apparent today.
-- Google is essentially admitting via this action what they've been admitting in small private circles for some time now: ROI on second and third tier properties is below that on higher quality properties. Of course, we knew that already. ;-)
Of course there IS a flip side, and some of the very small and mid-sized players who know PPC well already see it: Some sites that look like crap actually perform pretty well. And some savvy ad buyers will know to take advantage of this.