Today is the final day for Adsense publishers to update their Privacy Policy in response to Google’s new initiative called Interest Based Advertising. I had mentioned that I don’t recommend opting out of using Interest Based ads and a few readers seemed concerned about this. I thought a short post to clarify my thinking was in order.
(note - this site is not associated with Google.com or Google Adsense and you are encouraged to visit Google directly for more information.)
The idea behind Interest Based Ads is to increase CTR and conversions in regards to Adsense. The current Adsense model is based on Targeted Placement ads and while it has helped Google keep their Advertisers happy in the sense that they save money by not paying for poorly converting clicks (smart pricing) it has not had the effect of increasing Google’s revenue or in increasing the advertisiers overall sales. Ultimately Google needs to increase revenue without loosing advertisers in the process. Moreover Google wants to increase it’s advertising inventory and the best way to achieve this is by getting advertisers to buy more advertising. To do this they will have to provide better ROI to the advertisers.
Hence… Interest Based Ads. The premise being that a large portion of adsense page views are shown daily to untargeted visitors who may be reading any given site for any number of reasons but not necessarily because of any particular interest in the subject matter. Think of people who follow links from one article to another and end up on a site that has little to do thematically with the site they began their journey on. In most cases these visitors are never going to click on an ad and for the few that do they are unlikely to lead to a conversion for the advertiser. The question is - what if such users were presented with ads relevant to their search history rather than ads relevant to the current page they are browsing? Could Google entice more clicks and could this lead to higher conversions for the Advertisers? We will find out…
As for Publishers this should not be viewed negatively as there is a potential upside and escpecially for those publishers who don’t drive primarily targeted traffic to their sites. Given the fact that Google will decide whether to show targeted ads or Interest based ads to any particular visitor means this should reduce the likelyhood of a publisher being smart priced as G can’t hold the publisher accountable for poor performance of Interest Based clicks. (or it shouldn’t as the performance or lack thereof is not in the publishers hands)
To put it simply Google is trying to increase CTR where it feels it can and is not likely to penalize Publishers for poorly converting ads that Google displays on their sites beyond the publisher’s control. The real upside is that publishers may see a nice increase in CTR and earn more revenue even from low paying CPC ads without being smart priced in the process.
Whether this pans out or not I recommend everyone at least take part and test it before opting out. There is nothing to be gained by not giving it a shot. It may not work for some and one can always opt out later.
For those of you driving mostly social traffic this is what you have been waiting for - Google like everyone else is trying to convert social traffic. It is a huge market and so far has proven hard to monetize. Will Interest based ads work? Who knows but if it does publishers will see much better returns from their Adsense accounts. If it doesn’t then publishers are no worse off than they are now. And that is why I recommend everyone give this a trial period in order to evaluate the results. If your earnings tank - opt out but at least find out first.
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