I got the impression this was more targeted at banner adverts, rather than text adverts?
i.e. generic banner adverts for branding have a very low CTR compared to well targeted text ads, so if Google doesn't want to lose money for showing them, they've got to make it CPM instead.
It seems to make sense not to ignore banner advertising - if they could rival the existing CPM networks they could add on a good deal more revenue pretty quickly.
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