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Why Google Panda Is Great For Online Advertisers

It's been almost a year since the much vaunted Google Panda update was rolled out globally, during which time industry professionals have extensively covered the various winners and losers in the SEO rat race. However in an update rolled out in late January 2012, Google may well have created the biggest winner of them, online advertisers and here's how...

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."

In essence, Google argues that if a site is too "top heavy" with advertisers, or dedicates too much of its space to ads instead of content then the user experience will suffer. While Google has claimed the impacts affect less than one per cent 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.

Research from Metric Science suggests that the average number of banner ads on a page now sits at just over five, 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 where supply vastly outstrips demand. There were (and still are) 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. Of course, the reality was that this only further devalued CPMs; more ads = more competing messages = less effective ads.

There is a somewhat famously overused advertising quote from John Wanamaker , considered by many to be the father of modern advertising; "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. On average over half of the banner ads served on the internet are never seen with some entities such as Realvu claim that this figure is as high as 90%.

Ad serving and reporting technologies have 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 overall quality, as opposed to quantity of online advertising. Hopefully the rest of the pieces will also fall into place sooner rather than later.