May webmasters gain from this competition

[sahil123]

I think with YPN also emerging in the picture. Both the biggies ( G and Y ) will increase the percentage to the publishers. YPN is only available in U.S. at present but they must be planning to go global, and this will certainly boost the competition. May webmasters gain from this competition.

[ezgo]

I think webmaster will lose instead of gain(maybe I should not say lose but make less in the same amount of clicks). Because advertisers have more options to choose and they bid for the Ads to show up on publishers' website. So I think more competitions will make the cost for per pay click drop, which makes webmasters gain less in the same amount of clicks.

[europeforvisitors]

Google already pays about 78.5% of its AdSense revenues to partners, and it's hard for me to imagine that percentage outlay growing.

In my view, it would make a lot more sense for Google to simply allocate its payouts more efficiently: i.e., pay higher amounts to the publishers it can least afford to lose, and pay lower amounts to publishers who are less profitable. This would be a win-win situation for Google: It would retain higher-margin and/or higher-revenue publishers for Google, and--by encouraging less profitable publishers to seek their fortunes elsewhere--it would be lowering the quality of the YPN applicant pool.

As for competition lowering advertiser bids, that remains to be seen. It will be a long time before YPN can supply the kind of inventory that Google has for specialized keywords and keyphrases (especially outside the U.S., where YPN is a newbie). Plus, across-the-board averages don't mean much to individual publishers, as anyone who reads this forum's conflicting reports of declining or increasing EPC, eCPM, etc. can attest. To put it another way, if the bid for "Web hosting" declines on AdSense because YPN can deliver inventory for that phrase, that doesn't necessarily mean I won't earn the same (or more) from Google for "Elbonian kayak cruises" or "nude resorts in Widgetville" or "Shelbyville vacation rentals."

[roycerus]

When there are two big buyers in the market for tomatoes, the number of tomatoes don't increase. In other words - inventory or collective number of page impressions is not increasing. Yes, new tomatoes are growing every day - but not because of a new competitor buyer. It will increase the payouts being paid to publishers as Google's leaked slide show suggests. And this is only natural as there are more buyers for our inventory.

Slide #9 - More Complete Ads System

Now let’s look at another core element of our business: advertising. Consider that today, 1 in 4 retail dollars is spent online, and you’ll immediately understand the tremendous opportunity before us.
Our ads business for the moment is healthy and growing and we’re on a strong trajectory

* projected to grow from $6bn this year to $9.5bn next year based purely on trends in traffic and monetization growth

But strong competitors are attempting to aggregate traffic

* AdSense margins will be squeezed in 2006 and beyond
* Y! and MSN will do un-economic things to grow share
* The ad network will be commoditized over time

But I seriously doubt that Yahoo will make that big an impact internationaly. Their targeting is just not that great unless it's been implemented using their premium publishers api. Their crwling and ad serving technology needs to improve a lot.

[sahil123]

But both the biggies will have a fear of publishers switching over to the other, especially Google. So, I think G would do something to keep publishers happy.

[ezgo]

I think europeforvisitors is right on Google has paid what it can pay most. I don't see what else it can do to keep publishers happy.
Maybe Google starts to feel the competitions from Yahoo and/or others so that is why we see Google's ad more often now.

[Andrew Bassett]

In my view, it would make a lot more sense for Google to simply allocate its payouts more efficiently: i.e., pay higher amounts to the publishers it can least afford to lose, and pay lower amounts to publishers who are less profitable. This would be a win-win situation for Google: It would retain higher-margin and/or higher-revenue publishers for Google, and--by encouraging less profitable publishers to seek their fortunes elsewhere--it would be lowering the quality of the YPN applicant pool.

This would be akin to feeding your sows and starving your calves. Google can't survive in the long term without developing its prospects (no company can).

[JollyK]

I'm pretty sure that whatever YPN is offering now, they're going to reduce it after the beta. Their TOS or Policies or one of those states that they reserve the right to pay you a promotional rate which they can then drop at any time. This hints to me that they're paying higher during the beta to tempt people away from Adsense while planning to drop it when they get out of beta.

Lots of people have noticed sky-high CPC on YPN compared to Adsense. Now, since Overture bids are often higher than Adwords for the same keyword, this kind of makes sense, but you have to wonder, especially since the CTR seems to be a lot lower on YPN for a lot of folks.

I imagine the big competition is really going to be for advertisers rather than for publishers, so I do expect to see CPC dropping as they fight it out.

Hard to say, though. One thing's for sure: publishers may be in for a bumpy ride. :-)

JK