Hardik Thakkar on Web Development, Internet Economics and other unrelated things

In my opinion, yes.

Why? Because if the visitors will be getting revelant results in the natural search itself why would they bother visit the ads?

A strong counter arguement will be that site-flavoring will tend to make the ads relevant too (though google has not said anything to that effect, that much sophistication has to be expected), however here we need to crunch some numbers.

Let’s take the example of the word ‘bass’ used by google in their official post when announcing the feature. A search for the word bass tells me there are 228 million pages with the word in the google index. Let us presume 100 million are for musical bass and 100 million for the fishing bass. But at any given time, the number of adwords bidders for this keyword would a small fraction of this number, enough for both kind of listings to appear on the results page. When a person searches for bass without any flavoring or personalization he would tend to get a mixed natural search results and there would be ads for BOTH kind of ‘bass’ near the top. Depending on site rankings and other SEO factors the first few  results might not be the bass he is looking for and he may end up clicking on one of the ads around the top rather than scroll down looking for more. Now were this been a flavored search, the natural search results would have been good enough for him and he would not really have had to bother with listings under ‘Sponsered Links’.

I have seen a similar analogus in site-based ads; on almost all of my sites, on days of major updates clickthrough percentage is lower than usual. I attribute this to the fact that people find what they are looking for on the site itself not needing to go elsewhere.

But in this case, I have several advantages myself, most importantly though CTR % is low the sheer number of visits is high because of pinging factors, secondly when visitors find what they are looking for on your site they are cetainly much more likely to come back and link to your site in their blogs, etc.

In case of relevant search results there are no such advantages for the site owner since the users are anyway going to other sites.