Google should remove that from my reports page, and hire me in place of the guy/gal who wrote it.

Placing more than one ad unit on a page often generates more revenue.
Many of your sites only contain one ad unit.

And ofr our ads they add littele arrows to place in even more than fit in the available space ...

On what do they base this assertion?

The quote comes from [money.cnn.com...]

I agree with MyNewPC. What evidence is there that Paul La Monica has any better idea of what Google is doing than the people here at WW who seem to have a limitless supply of assumptions about Google?

FarmBoy

Artist Mike, One hahahahaha is enough!

Two hahahahaha means your getting hysterical! :o)...KF

What am I missing here?

Total Revenue = Cost per Click x Number of Clickthroughs

If you reduce the number of ads on your page from 12 (3 adpanels) to 4 (1 adpanel) and your CPC goes up but your CTR goes down, your eCPM will end up being lower than it was before, won't it?

Example:

Adpanel 1 above the fold gets 5 clicks per day
Adpanel 2 above the fold gets 3 clicks per day
Adpanely 3 halfway down the article gets 2 clicks per day

10 clicks per day on 12 ads which pay out $0.20 = $2 per day

Publisher removes Adpanels 2 and 3:

5 clicks per day on 4 ads which pay out $0.35 = $1.75 per day

Result: Net loss of $0.25

So how does reducing the number of ads on one's page so it can actually generate more revenue per click increase Total Revenue?

Is the scenario I have described quite far from reality?

At this point, the reporter has provided no basis for his assertion, but even if reliable, I think his assumption of increased relevance of the remaining ads would suggest a higher CTR which would translate to more revenue. Your example shows that clicks will not increase on that one ad panel.

What am I missing here?

You are overlooking at least three variables:

First, with fewer ads being displayed, the remaining ads will get more attention from users; therefore the per-ad CTR will tend to increase.

Second, with fewer ads being displayed, some advertisers will increase their bids in an effort to get their ad seen in the limited amount of space remaining.

Third, with fewer irrelevant ads being displayed, users will come to perceive the (few remaining) ads as always worth looking at. In turn, this may enhance the overall perception of Google's search service, and encourage users to always look at the ads, so this becomes a matter of habit, thereby increasing CTRs over the long run.

For all of these reasons, the CTR rate per ad and the price per ad could increase. Whether or not there is a net improvement in revenues over the long haul is an empirical question that can easily be determined through experimentation and data analysis.

The other thing to consider is that the ads are worth less per click as you get further down the HTML in the page.

I decreased my total number of ads, which slightly decreased by overall CTR, but it increased my eCPM.

I had an ad in the sidebar on the left of my pages, and another ad in the content. The ad in the sidebar was first in the HTML code on my page, but got a much lower CTR than the ads in my content.

I simply removed the ad from the sidebar and left the ad in the content. Now, all of those content ad clicks were earning more, since it was now the first ad on the page. Voila!

You guys have a hahahahaha limit now?-?-?

Sorry, I haven't been around much, must of missed that decree. <¦o)

[edited by: Khensu at 2:33 am (utc) on April 14, 2008]