Google Will Increase Revenue With The New TOS

A different take on the new affiliate policy

[AZEvil]

I have been reading through the various threads about the new policy and I haven't seen anyone point this out yet (please correct me if I am wrong):

Google is still going to show AdWords on every page of the SERPS. This means that Google will be showing just as many ads as before for the majority of terms...especially big money terms. What they won't be showing is the lower paying affiliate ads.

If a user is going to click on an ad at some point, wouldn't you think Google would rather be showing higher paying ads the whole way through the SERPS?

This leads me to believe that Google has nothing to lose by putting this new policy in place. Until the affiliates replace their links with their own landing pages and domains, Google will be banking quite a bit more money. Once the system becomes overrun with landing pages, I would expect to see more policy changes to help combat those. Google isn't stupid :)

[MovingOnUp]

I think you have a valid theory, but some flawed logic.

Let's assume that eight ads are shown on a search results page, and that four of those are currently affiliate ads (or more correctly, ads with duplicate landing page). The top one of those affiliate ads is the best paying of the four, but the other three are still better paying than ads 9, 10, and 11 (the ads that will move up to fill the bottom three when the duplicates are removed). The net result is that lower paying ads (on average) are displayed.

But there are at least three other factors that will help increase the revenue:

1) There will now be a better selection of ads, so searchers will likely click more and find the ads more useful. This will increase revenue.

2) Some affiliates will create their own landing pages. This will reverse the trends and put those higher paying affiliate ads back in their place.

3) The remaining affiliates will need to bid higher to ensure that they get shown. This will increase their CPCs and the CPC of the ad above them. This will increase revenue.

When you take into consideration these three factors, I think there will be a slightly negative impact on revenue in the very short term and a neutral to slightly positive impact on revenue in the long term.

[europeforvisitors]

I think AZevil has a good point. One thing many AdSense publishers have noticed is that revenue often drops when more ads (i.e., two ad or three ad blocks) are displayed on a page. On my site, four ads (one leaderboard in my case) seems to be the "sweet spot." Anything more is likely to result in a lower CPM.

[toddb]

In an auction environment, more competition usually leads to higher prices. Google is not a true auction model as they weight for CTR but overall IF they end up with less ads, logic tells me revenue will dip.

The Ebay guys that everyone has noticed and probably triggered this move to some extent, are huge spenders. They make their money on volume.

What you have to love about this move is it was clearly not made to increase revenue. It was about the end user. The revenue arguement is very open.

[ned911]

The cost of my keywords has increased across the board. Also noticed that my CPM has increased in Adsense. Seems to be generating Google revenue in the short term.

[MovingOnUp]

The new policy hasn't taken effect, so any change you're seeing now is unrelated.

[toddb]

Any change you are seeing now is directly related tot eh announcemen of the pending change.