Why Multiple Ad Units?

What's the business benefit for google?

[rbacal]

I'm beating my head against the wall trying to figure out the present or current business benefits for google in allowing multiple ad units. It's pretty obvious that supply and demand is going to push down bids for ads (which is certainly why many of us are seeing progressively lower adsense revenues as the market adapts).

So, speculate. Is it an attempt to pull in more low bid advertisers to the content network (since it's now much more useful to bid lower)? Is it the beginning of creating a premium publisher network?

There must be some business/bottom line reasons beyond a desire to give publisher what they want (err. always be careful of what you wish for...mamma said).

Why would a company intentionally DEVALUE it's inventory?

[disgust]

it's acceptable to devalue your inventory if your overall net is going to increase. that's why they did it.

yes, most cost-per-clicks are dropping. but most individuals overall earnings are increasing- that means more money for google, too.

[alika]

It's all about maximizing revenues. The revenue source is always the most important part of the equation. With Adsense, it is the advertisers (not the publishers).

Google has to think how it can maximize revenues. One constraint it has seen is the limited number of ads that can be shown in a page. Pre-Sept 1, publishers can only show 5 ads at the most. This gives Google X amount of revenues.

But by relaxing this constraint and adding possibly 10 more ads to make 15 maximum ads per an Adsense page, then Google's income increases to:

X + X/2 + X/3 = more revenues
so even though revenues for the 2nd and 3rd ad spots are lower (because these are lower bid ads), it is still an incremental income for them.

Plus, they get to entice more advertisers to try and join the program -- who hopefully would be happy with their results to increase their bids and fight for the top spots in an Adsense page (just like what they do with the search pages).

Google knows that many advertisers are not willing to bid top monies for their keywords -- they are simply satisfied with their ads showing in the 2nd or 3rd pages of the SERPs. With this multiple ad format, G is hoping that these types of advertisers may want to join the content network program.

Many publishers requested multiple ads, probably with the mistaken notion that they will get the same (high) price for all the ad formats, forgetting the sliding scale used in the SERPs. Now they realized that the multiple ads are showing lower cost per click, and they're not too happy with the fact.

[Lord Majestic]

I'm beating my head against the wall trying to figure out the present or current business benefits for google in allowing multiple ad units.

In addition to what people said above its in Google's interest to capture a lot of real estate on various websites. Remember how Netscape died - Microsoft made deals with OEMs not to ship Netscape as part of software bundle on PCs. Getting better browser (IE4) finished the job.