Doubling Google Profits Overnight

Here's a thought on how Google could double their profits overnight by making some changes to their ad server.

If you are displaying Google ads on your website or blog, you already know about CTR. It is the click-through rate your site generates at any given time. If you get two clicks on ads for each 100 page views from your visitors, your CTR is two percent.

I have a couple of different sites and the CTR varies enormously - not just between different sites but also on a day to day basis depending on what pages people are landing on and what the individual posts are about.

But if you're wondering who gets the very highest CTR's, the answer is the initial Google search page where people begin their search. I don't know what the exact CTR rate is here (does anyone have this info?) but I know it averages way higher than on Google's partner sites.

(Update February 24th: Just saw this same question posed at the Search Engine Roundtable:

What percentage of search engine users click on paid listings and what percentage click on organic results (paid inclusion listings aside)?

Forum moderator Chris D posts the following stat from a 2004 iProspect report: On the Google search page - 72.3% of people click on the organic listings, while 27.7% click on paid ads.)

This is an incredibly high click-through rate for ads on the first search page!

You might think it is obvious people would click more here as it is the first page they look at and if they are seeking something very specific - especially product or service related - they will immediately be exposed to ads by people selling precisely that product.

But the other advantage that the Google search page has in comparison to Google ads showing on your site, is that the actual ads that show up are precisely targeted to the actual keywords that people have typed in.

For example, if someone is seeking information about 'hybrid cars' and they type in these two keywords, they will find a lot of ads on the Google search page which are precisely geared to their search.

However, if they ignore these ads and scroll down to find a website with info about 'hybrid cars', they may land on your page at some point if your page mentions this term.

And once they've landed on your page, it often turns out that the main topic on this page is not the same one as they were searching for; that 'hybrid cars' is just a small part of what this page is about and hence none of the Google targeted ads are going to be displaying it on this page. Instead, as you now see on this page as an example, you are going to be seeing ads about Google and how to make money with online advertising.

So basically the click-through-rate is bound to be lower, because the ads that show on your page are not targeted to the actual search terms that bought people to your site, but are rather targeted to the keywords that are most often found on your site.

Now what does this have to do with Google doubling their profits overnight?

If there was some way for Google to serve ads on your site that related not just to the words found on your site, but also took into account the actual search terms that bought each visitor there, you would automatically see a huge surge in CTR's because the ads would be much more relevant to readers. The click-throughs on websites would now come close to the very high CTR averages on the main Google search result page.

Right now about 55 percent of Google's revenue is from clicks on ads on their search-page results. But the other 44 percent is their share of the revenues that come from clicks on publisher partner sites.

So if Google was able and willing to set the ads serving on partner sites to be dependent on the actual search term that led people to these sites, publisher clickthroughs would probably go through the roof - I would guess up by a minimum of five hundred percent.

I'm totally ignorant of what kind of technical and privacy issues would be involved in changing the ad server to take this into account. And I'm not sure about how this would change the spamming, keyword abuse side of the equation. Would love to hear any thoughts anyone has on this.

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The above art print is 'Double Scoop' by Jennifer Sosik