AdSense publishers received some potentially good news the other day: Google is opening up AdSense to third party ad networks.

The move, which will enable these ad networks to compete with AdWords advertisers for available AdSense inventory, is clearly designed to boost Google’s revenue from the AdSense program.

Google believes that “more competition [will translate] into better ads and increased revenue in the long
“. Because Google shares revenue with AdSense publishers, any gains seen by Google should also benefit publishers.

Google has started to roll out these third party ads but it isn’t turning the floodgates on overnight. All ad networks wanting to participate will have to be certified by Google to ensure that their ads comply with Google’s standard AdWords advertiser terms. And to start, ads from ad networks will only be displayed on the sites of AdSense publishers located in North America and Europe. Reporting functionality and payments will not see any changes.

Publishers who don’t ad network ads being displayed will have the ability to block them; Google is permitting publishers to block these ads completely or to block specific ad networks. This is a smart move because while one can hope that Google’s certification will be effective in maintaining ad quality, it’s likely that some publishers will find reason to block certain ad networks.

The big question: what does this mean for advertisers? More competition is definitely a good thing but if lots of ad networks join the fray, it could have implications for smaller advertisers. Some may find themselves priced out of the market if competition drives prices up. And they may also find themselves at a disadvantage to ad networks that leverage Google’s interest-based advertising tools, which will be available to them if they comply with Google’s user privacy guidelines. To my knowledge, these aren’t yet available to all AdWords advertisers.

Concerns for small advertisers aside, Google’s job is to maximize the efficiency and performance of its ad platform and if Google can do those things by retooling the AdSense network as a network of networks, there should be more benefit than loss.