Adsense Ethics: Should Google Advertise Google Products In Adsense?

We recently experimented with switching our adsense to image ads only. One thing we noticed right off the bat was that "Google Toolbar" ads were showing right and left.

Adsense may from time to not have the inventory necessary to serve ads to a publisher’s site. It only makes sense that there would be less image ads in inventory than text ads. We fully expected to get PSA’s (Public Service Ads) after switching to our all image format. Google recommends against limiting ads to one specific format for this very reason.

To date, I haven’t seen one single PSA in the image only slots. I’ve seen ads for the "Google Toolbar" almost once per page.

Is Google interjecting their own ads in place of PSA’s?

Adsense is hardly transparent. Because of the mysterious shroud surrounding the enigma that is Adsense, publishers can only speculate as to what is really going on. I am speculating.

Adsense ads are served based on many different factors including bid price, content relevancy and other secret factors that no one but Google completely understands. If there are no ads to be served, publishers are supposed to get PSA’s.

How hard would it be for Google to show their own ads instead of the PSA’s? Not hard at all, it’s their system afterall.

I have no way of telling, but I think you get paid for the Google product ads. Google could easily default an otherwise empty ad inventory slot to their "Google Toolbar" ad and bump the PSA from the rotation with a flick of a switch, I’m sure. Publishers being paid for the ads might not mind all that much because people have had complaints before about too many PSA’s showing on their sites.

Is this fair? I realize I may be the first person to mention "Adsense" and "Ethics" in the same post, but would it be fair for Google to, in essence, step in at the end of the auction when no ads would otherwise be served and place a token bid to serve their own ad using their omnipotence of the interworkings of the Adsense auction process?

No other publisher has this benefit. I realize Google owns the system and can do whatever they want, I’m only asking if this were happening, and I don’t know that it is, would this be fair?

If it is happening, I don’t think it would be fair to advertisers, publisher’s, or the PSA’s.

The PSA’s? I know, don’t feel too bad about them, they’re getting something for free, so they get what they get. I don’t think any publishers really want more PSA’s to show in their valuable adsense slots. This is not really the basis of the potential ethical problem for the adserver / auction controller.

The practice, if it were happening, would be completely unfair to advertisers and publishers. Advertisers are on the same, theoretical, level playing field in the auction. Only the advertiser’s skill at writing the ad, selecting keywords and their willingness to pay for the ad should set the advertiser apart from another. If Google were to use insider knowledge of the auction that is completely unavailable to everyone else to somehow trump another advertiser, this wouldn’t be fair.

Publishers could be screwed royally by such a practice. Whenever a publisher creates Adsense code for their site, they have the option of selecting an "Alternate Ad" to be shown in the event the Adsense inventory is not filled and no ad could otherwise be served for their page. Many publishers use affiliate ads to take the place of the empty spot or inevitable PSA that would be shown in an empty slot. If a publisher posts an affiliate ad, like one from Commission Junction or some other Adsense alternative, the publisher still has a chance to convert the valuable space to income when no other ad could be served by Google.

If Google were to step in at the last minute and participate in the auction for the space and serve their own ad for something like the "Google Toolbar" and bump the PSA out of the lineup, the publisher’s alternate ad is also bumped from the rotation. Google would be able to interject their own ad using knowledge that is not available to other advertisers to, in effect, win the auction and prevent the publisher’s affiliate link ad from showing.

This would be great if people were clicking the "Google Toolbar" ads, but I think reality is different.

Because of the lack of transparency in the Adsense process and the possibility of such a system, the potential for impropriety exists and an explanation would be nice.

What do you think? Is it unethical for Google to participate as an advertiser in their own auction when the auction is not transparent, monitored or verifiable?