Tag Archives: measurement

Why Google Panda is good for online advertisers

20 Mar

It’s been almost a year since the much vaunted Google Panda update received its global rollout, during which time industry professionals have at length covered the various winners and losers in the SEO rat race. More recently, however in an update rolled out in late January Google could have just created the biggest winner of them, online advertisers. Here’s how…

Top Heavy Ads

It’s been no secret that the Panda update has been quick to penalise sites which, in Google’s own words “display a large fraction of the site’s initial screen real estate to ads.”  Essentially Google argue that if a site is too ‘top heavy’ with advertisers, or dedicates too much of its space to ads over content then the user will suffer. While Google has claimed the impacts affect less than 1% of search results, many publishers are claiming it to be much further reaching. With an additional 500 updates to Panda scheduled for 2012 alone, Google has recommended that publishers focus on improving the users overall content experience and make it as easy for them to find and enjoy the content they are looking for.

Where did all the ads come from?
Research from Metric Science, a media evaluation company, suggests that the average number of banner ads on a page now sits at just over 5, a pretty sizeable amount for just one page of content. Add to this more interruptive formats such as contextual ads (those annoying hover overs), site skins and interstitials and you get a pretty cluttered and congested environment.  But it wasn’t always like this….

It was only sixteen years ago that online saw the sale of the very first ad banner on HotWired. Back then online was new, exciting and expensive. Fast forward to a decade later (and a dot com crash in between) and prices had begun to decline dramatically. Online display had become a more mature market, one in which existed unparalleled supply. There were more media owners and networks than ever before – everyone was rushing to monetise their online content.

While the industry continued to grow rapidly and advertisers shifted more of their budgets online, the pace of growth could not keep up with the increased availability of advertising inventory.

Naturally as CPMs (cost per thousand impressions), the defacto standard for buying and selling banner ads, began to fall, media owners looked to ways to maintain revenue levels. For many the answer was to simply put more ads on their pages, squeezing as many ads on to their already congested sites as possible. Ofcourse, the reality was that this only further devalued CPMs – more ads = more competing messages = more ineffective ads.

Re-Defining Advertising Quality

There is a somewhat famously overused advertising quote from John Wanamaker  – “Half the money I spend on advertising is wasted. The trouble is I don’t know which half.”

For online advertisers, this statement couldn’t be more true. You may be surprised to hear that on average over half of the banner ads served on the internet are never seen – some such as Realvu claim that this figure is as high as 90%.

Ad serving and reporting technology has for years not been able to catch up with the growth of the industry as a whole. Thankfully, this is now changing – and using freely available solutions advertisers are now able to better understand the advertising that they buy. Consequently they are beginning to ask, why they should have to pay for ads that are never seen? And rightly so…

Those networks and media owners who move quickest to adopt these new technologies will prosper, while others will continue to sell congested ads on congested pages without being able fully demonstrate their effect and relative value.

Google and the latest Panda update is one step closer to improving the overall quality, as opposed to quantity of online advertising. Hopefully the rest of the pieces will also fall into place sooner rather than later.