I think PPC market share is mainly determined by inventory – i.e. dependent on search quality, brand and toolbar traffic. I don’t think MSN would make serious inroads if they somehow were more transparent.

I think this topic is one of those that the market-sensitive elites like the root markets guys (and myself) would tend to over-emphasize in importance.

The most successful online ad market of all time has never been CLOSE to transparent. Google’s gotten much more opaque over the last 2 years, and yet it completely DOMINATES the others.

That makes me think that this market / pricing transparency thing is over-rated…

Furthermore if MSN or Google did open up more, I think they would be innundated with more spammy ads than ever… Basically Google’s rules and choices do prevent a lot of irrelevant ads from showing up all the time.

Crazy as it sounds, I’m sure Google really doesn’t want to sell all possible ad space to marketers. It would hurt their inventory generation machine…

Basically it’s click-through * cpc, but the variables that contribute to click-through are increasing rapidly from lots of different data points and a data history that is growing larger (what the consumer has searched for, what ads they have responded to, where they visited in the adsense content network, what time of day it is etc.), such that transparency for marketers has been clouded and they are left to simply make sure they have a positive ROI.

They don’t do this because they don’t have to. If MSN were smart, they’d do it. They certainly don’t have margins to protect or enough ppc ad revenue to worry about profit yet. Their problem is share. If they wanted share and this is really a big problem they’d make the margins of publishers and advertisers more transparent.

A) At Google at least, they are making tons of money already and the problems they have aren’t related to getting more buyers / sellers.

B) Yahoo had such a system and it pretty much lost – in terms of relevancy, overall profit and market share. Of course, it wasn’t totally open (i.e. it has a .10 min bid), but it was close.