9 google ads 4

Google’s filler ads when they are out of inventory

If you are a avid reader of blogs like I am, you have probably started seeing an increase in the number ad blocks inviting people to advertise on Google. These “filler ads” show up for a number of reasons such as bringing in more advertisers. But more often, it would appear, its because the giant ad company is out of inventory. Here is what we found out from some of our contacts within the company.

9 google ads 2Balancing online ad inventory with vacant media spaces to publish them in has been a constant challenge for the Google team.

In February, Google started taking action against content farms that were gaining top listings with “shallow” or “low-quality” content.  The new algorithm — Google’s “recipe” for how to rank web pages — starting going live on Feb 23rd. Even though the changes were announced as a response to critics, the real reason, according to our inside sources, was a substantial drop in ad inventory.

Google changes its algorithm on a regular basis, but most changes are so subtle that few notice. This one was different. Google says the change impacts 11.8% of its search results in the US , a far higher impact on results than most of its algorithm changes. For the moment, the change only impacts search results in the US, but it may be rolled out worldwide in the future.

No Effect on Earnings So Far

Even though there has been no apparent impact on earnings, with Google reporting revenues of $8.58 billion in the first quarter of 2011, representing a 27% increase over first quarter 2010, the issue of declining ad inventory may be bigger than most people think.

“The overall number of online pageviews across many different platforms has been climbing, creating a staggeringly large gap in fillable space,” inside sources indicated.

For now, it may only be a temporary issue. But we will be monitoring it closely.