The Core

>> the launch of Instant has increased the impressions for paid search ads by more than 9 percent and the number
>> of clicks increased by more than 5 percent.

>> Marin added that the spending also went up 2 percent after the launch of Instant.

http://www.lanewsmonitor.com/news/Instant-Search-Opens-New-Revenue-Stream-For-Google-1289117102/

Sure, it was all about the user experience. I see that now

We can't be certain that is the right number across the board (although I'm sure some bright spark will have a go at deriving it from the next set of quarterly figures or something), but they have a decent dataset, $1.3 billion of spend or something, so I'd surprised if they are way off.

It is a short period of analysis though. It might not stay such strong effect for ever, as people get used to it, turn it off, whatever, but even if they ended up with a lower structural increase of, say 3%, on their revenues, that's worth having. Their quarterly revenues are what $7bn now? Even 1% of that buys a lot of Mountain Dew

has anyone else noticed some apparant relaxation of the 'spelling error' clause allowing people to advertise on phrases which just happen to be suggested before their target phrase without too much quality score loss?

I'd imagine that they are going down. 

In my mind the scenario goes like this:
Someone wants to search for "blue widgets size twelve", they type "blue" and get served ads.  At this point the see ads and some will click on one.  Obviously the searcher isn't very likely to find what they want from such a broadly matched ad, so he hits the back button and continues to type "blue widg..." then another serp appears this time more relevant, he then clicks on the top spot and sees something that is closer to what he was expecting.  He may buy here or not.  If he doesn't then he adds more terms to his search and finally gets to "blue widgets size twelve", goes again to the top spot and most likely settles there for the purchase.

Obviously, not everybody will do searches like this, but I bet a good number do.  Maybe even 5%.  So, what we have is the EPC going down for the advertisers, the searcher clicking on the free results even less, and ads being displayed three times as much will less relevant targeting.  Also, you have the shorter and often more expensive terms being displayed before the long tail terms get shown.  Brilliant for Google, pretty bad for everyone else.