Motley Fool article about Adsense

"[Google] has such a backlog of ads, it can't distribute them fast enough"

[Rodney]

Interesting article about Google and Adsense at Motley Fool today:
[fool.com...]

How stocked is Google? Well, until this week it required that AdSense-approved content sites run no more than a single block of ads on any given page. In an email to publishers yesterday, it said it is opening up that option to allow for as many as three ad blocks.

In other words, the company has such a backlog of sponsored ads that it can't distribute them fast enough through its existing network of consumer access points.

And I thought they gave us more ad units just because they liked us.

[Clark]

It isn't a backlog. It's an opportunity. Just because an advertiser doesn't reach his daily budget does not mean it is a backlog.

[linear]

Sure sounds to me like he's leaping to that conclusion with pretty much no additional evidence though.

[alika]

Don't writers do that all the time -- present their analysis and viewpoints on an issue? Yes it is speculation

But what he is saying actually makes sense. It's classic economics: supply vs. demand. Something was not maximized (e.g. revenue from Adwords advertisers) because of inherent constraints (1 ad block to show only the topmost paying ads). Ergo - remove the constraint (allow 3 ad blocks) in order to maximize revenues.

It's supposed to be a win-win situation, but the verdict is still out on that one. Let's wait a couple of weeks or so to really see the effect of the multiple ad block.

[Chndru]

I am just guessing here..

To get more real-estate for image ads.. since in order to display an image ad in an ad block, they require the image ad bid to be more than all the ads in an ad block combined (or something like that).. it's easier to meet that criteria using the third block than the first one.