Doug Stotland, Group Product Manager, adCenter, MSN Search, advised advertisers yesterday that they have the “capacity to pay more for a click.”

During a Search Engine Strategies Conference panel, “Meet the Search Ad Networks,“ Stotland recommend that advertisers “adapt and adopt” to “Rising CPCs and the “Big Roi Gap.”

Stotland indicted that he is often asked when clicks prices will “stop rising” and why the “Big ROI Gap” is getting bigger. According to Stotland, there are three explanations for rising click pricing:

• Increasing demand from new advertisers and from bigger budgets of existing advertisers;
• Irrational advertisers bidding up click prices;
• Increasing ROI from search advertising.

Read more about Doug Stotland's take on rising CPC prices at ZDNet blog.