We recently asked the Google MD for India on WATShow whether CTR (Click Through Rates) were dropping on google ads and whether google was doing anything to increase the response rates to its ads for the advertisers. The answer was a NO to the drop in google ads but if you see the latest comscore report it suggests that clicks on Google ads in the US were flat in January compared with a year earlier.

Now people are suggesting various reasons for this right from the slowdown in the US economy to Google’s self inflicted  rule which made lesser area of the ads clickable to google’s stand against adsense only sites that dont have any other content.

According to me in the longrun it will not be any of the above and the very reason google has compromised its own revenues and gone in for a lesser area of ads clickable and taken a stand against made for adsense sites is because it realizes that the users mindset towards google ads is the number one most important factor that may decide which way google’s fortune swing.

If you try and ask any educated non internet geek/enthusiast in India today about what he or she thinks consists of online advertising you may get 7-8 out of 10 people saying pop ups! People somehow never tend to forget bad advertising that cause inconvenience and popups are those and all of us have become immune or added popup blockers to avoid such things online. This is because the internet medium is such that anything intrusive can be blocked (its not so in TV or radio or print!).

In the same way with adsense only sites and larger clickable area (which caused accidental clicks) the user experience was affected thereby turning off users and hence google has taken a stand against the same. But what google cannot control is what content the user lands on after clicking those ads. Most people online are looking for information and not transaction. While most google ads are place to facilitate transaction i.e. either filling a form i.e. database collection or online sales. Very few of them actually give information. What this does is again creates an immunity in the users mind about what these google ads mean i.e. if the user has not found what he was looking for then he is very less likely to click those ads (in his mind links) again. Thereby making him immune to google ads.

Also one needs to consider that visually google ads are easily identifiable  and hence one can easily set a mindset of not to click on them if one’s experience previously has not been upto the mark. This according to me will the foremost reason of Google’s ad revenue slowdown. Only time will tell how google innovates further to stay ahead of the curve before another young startup (like google itself was) comes up with a patented better solution!

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