Google is reducing ads on web pages to an all-time low, which has many people scratching their heads.
“Virtually any other company facing slow economic times would be interested in increasing the places in which it could sell ads,” wrote Saul Hansell, in the New York Times article Google deliberately sells fewer ads – and may have gone too far. “It certainly wouldn’t take steps to reduce them.”
Meanwhile, Jonathan Rosenberg, Google’s Senior Vice-President for Product Management, said that Google has no plans to increase its coverage because of its efforts to improve what it calls “ad quality.”
By reducing the inventory, it would seem logical the per click price will go up with more advertisers competing for less space. As a result, the rise in click price will offset the click reduction.
And more relevant ads equal better search results, which should eventually translate to increased market share (or a greater stranglehold on the market) and revenue growth.
Plus, perhaps Google’s being proactive and discouraging Internet users from utilizing ad-blockers.
At the end of the day, the ones who will feel the greatest impact will be the small business owners who could be squeezed out of AdWords auctions. Small businesses in many industries may not be able to market through this means for much longer.