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What is Google's cut?
trand300

5+ Year Member



 
Msg#: 12091 posted 5:47 pm on Feb 13, 2006 (gmt 0)

Does anyone know what is Google's cut on the revenue that an advertiser pays? If an advertiser pays $1.00 for an Adsense word or phrase, how much does Google keep?

 

StuntasticAudi

5+ Year Member



 
Msg#: 12091 posted 5:48 pm on Feb 13, 2006 (gmt 0)

Enough to make millions of dollars a month. I dont think anyone knows the answer to this question. Google wont tell us!

celgins

WebmasterWorld Senior Member 5+ Year Member



 
Msg#: 12091 posted 5:56 pm on Feb 13, 2006 (gmt 0)

For the past few months, I've been hearing numbers like:

Advertiser: 77.5%
Google: 22.5%

Paris

10+ Year Member



 
Msg#: 12091 posted 5:58 pm on Feb 13, 2006 (gmt 0)

Google files this amount every quarter. They give 78.5% back to the publishers. The thing is that some like AOL get as much as 90% back while most of the smaller sites are probably -- though we will never know for sure -- closer to 65% to 70%.

wheelie34

WebmasterWorld Senior Member 5+ Year Member



 
Msg#: 12091 posted 6:39 pm on Feb 13, 2006 (gmt 0)

closer to 65% to 70%.

Dont forget to add a pinch of smart pricing, remember those 0.01c clicks, too many variables to work it out, variables we have no values for, some clicks will give you 70% some may only earn 30%

ken_b

WebmasterWorld Senior Member ken_b us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 12091 posted 6:46 pm on Feb 13, 2006 (gmt 0)

Dont forget to add a pinch of smart pricing,...

I don't think Smart Pricing affects the percentage paid to the publisher.

SP results in the advertizer being charged less for the click so the amount the publisher gets is smaller, but the percentage probably the same.

At least I have not seen any credible information that would lead me to think otherwise.

Mike_Werner

5+ Year Member



 
Msg#: 12091 posted 5:50 pm on Feb 22, 2006 (gmt 0)

I've just started putting out ads using Adwords. I was horrified to see what I have to pay for an ad, while with the same keywords, with Adsense I get almost nothing.

I was trying to get more readers, so decided to use Adwords to attract them to my site. So basically I use the same keywords as I would in Adwords.

In my calculations, Google keep 90-95%! I still love Adsense, I wouldn't be here without them, but this is a bit too much.

Try it yourself....

hunderdown

10+ Year Member



 
Msg#: 12091 posted 5:52 pm on Feb 22, 2006 (gmt 0)

Mike,

Was that for the content network only? You might have to bid a lot more to appear on the Google results pages.

And from my understanding of Adwords, you don't necessarily end up paying what you bid.

So you may be jumping to conclusions.

hunderdown

10+ Year Member



 
Msg#: 12091 posted 5:56 pm on Feb 22, 2006 (gmt 0)

Re smart pricing--whether it's affecting you or not doesn't alter the OVERALL percentage that Google pays to the publishers. That is still 77-78% as others have posted, and Google better not be lying about that, because that's based on their SEC filings!

I assume that I am getting somewhat less than that 77%--what matters to me, though, is that I am making considerably more with Google than I could with the alternatives.

Mike_Werner

5+ Year Member



 
Msg#: 12091 posted 6:38 pm on Feb 22, 2006 (gmt 0)

It was for content only, I disabled searches. That's why I was so amazed.... talk about a markup. I kept having to increase the CPC for Adwords.

I always thought that it was cheap to advertise via Google since I was only receiving a few cents per click, and now I find myself paying 1 dollar for the sale type of ads appearing on my sites...

Mike_Werner

5+ Year Member



 
Msg#: 12091 posted 6:40 pm on Feb 22, 2006 (gmt 0)

There's only one way of finding out. Spend the 5 bucks to join Adwords, put in a low budget, and find out what you need to pay for ads...I'd be really interested if this is just me screwing up, or if it's a general thing.

danimal



 
Msg#: 12091 posted 8:28 pm on Feb 22, 2006 (gmt 0)

to repeat what i've already posted:

the phrase being bandied about all over the 'net is: "Q4 traffic acquisition costs, reflecting the amount paid out to ad partners, was $629 million, or 33% of ad revenues."

hunderdown

10+ Year Member



 
Msg#: 12091 posted 8:36 pm on Feb 22, 2006 (gmt 0)

That 33% is based on Google's overall income from both search and content network. Since Google does not pay itself anything for traffic acquisition, the percentage for the content network alone is much higher--the 77% mentioned earlier.

driris

10+ Year Member



 
Msg#: 12091 posted 8:43 pm on Feb 22, 2006 (gmt 0)

sometimes i get 1 cent per click and thats the lowest price advertisers are paying on adwords..so whats the google share then?

whoisgregg

WebmasterWorld Senior Member whoisgregg us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 12091 posted 8:46 pm on Feb 22, 2006 (gmt 0)

To beat a dead horse, as an Adsense publisher would you rather have
100% of $1.00 or 50% of $3.00?

The percentage only matters if you plan on approaching the advertisers directly. Otherwise, it's dollars (not percentages) that should be the basis of financial decisions regarding Adsense participation.

sailorjwd

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 12091 posted 8:50 pm on Feb 22, 2006 (gmt 0)

Mike W

There is a lot more to adwords that just setting up an account. With the proper knowledge and time you can often lower your costs by 60-80%. I've been using it for 3 years and still learning stuff.

europeforvisitors



 
Msg#: 12091 posted 8:51 pm on Feb 22, 2006 (gmt 0)

There's only one way of finding out. Spend the 5 bucks to join Adwords, put in a low budget, and find out what you need to pay for ads...

That won't work, because the actual or net cost per click on any given site will vary with "smart pricing."

Maybe you could figure out a percentage if you bought site-targeted ads on your own site, but even if you could, that wouldn't tell you Google's compensation formula for all types of ads, content, or sites.

The only percentage that we can actually know is the overall payout to publishers (as calculated from the numbers in Google's quarterly earnings reports). Still, that's a pretty impressive number: It's a far higher percentage than traditional ad networks pay.

drall

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 12091 posted 9:22 pm on Feb 22, 2006 (gmt 0)

It is all about the bottomline and so far G has a far superior product to just about everything I have seen in 8 years, even better then the old doubleclick days for many of my properties.

The cut they keep to us pales in comparision to the hassles and headaches of selling our own ad space, dealing with deadbeats and latepayments, aquiring advertisers, contracts, billing and invoicing, balancing advert inventory, ad serving, advert approval yadayadayada.

europeforvisitors



 
Msg#: 12091 posted 9:30 pm on Feb 22, 2006 (gmt 0)

Google also deserves credit for having such a flexible contract: Publishers can display as few or as many impressions as they wish, there's no exclusivity clause, and publishers can quit without penalty at any time.

david_uk

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 12091 posted 7:31 am on Feb 23, 2006 (gmt 0)

I don't think Smart Pricing affects the percentage paid to the publisher.

SP results in the advertizer being charged less for the click so the amount the publisher gets is smaller, but the percentage probably the same.

At least I have not seen any credible information that would lead me to think otherwise.

Well, I don't know if my personal experience as an advertiser classes as "evidence", but FWIW:-

I've been advertising with adwords on and off for a year or more now. I aim to put 5% of my profit back into adwords to promote my site in related area's of search and content. I don't do it to make a profit (it doesn't) - it's an investment. If I advertise in content or not depends on if I judge the campaign is working or not - smart pricing "discount" is not a factor, as I know it doesn't exist. I usually start out advertising in both.

I have yet to recieve ANY discount on content clicks over search. Indeed, on one occasion I got charged MORE in content than I was in search! And like others who use adwords, I know what it costs to have an ad shown on my site. I also know what I get for those clicks.

I honestly don't believe that every single click ever made in content is going to be classed as a conversion - especially as I don't use conversion tracking (none of the options Google offer apply to me). I therefore conclude that smart pricing is a mechanism for Google to cream off cash for it's investors, whilst making advertisers think they are getting a good deal. If you are a large account and have an adwords personal representative looking after you, THEN you may get a discount. But smaller advertisers (and there are a lot of us) are seeing nothing.

Smart pricing is NOT an inducement to advertisers.

europeforvisitors



 
Msg#: 12091 posted 7:53 am on Feb 23, 2006 (gmt 0)

...This is bad news for media companies that are already hurting badly from the efficiency of search engine marketing, and were at least earning some money from being members of Google's AdSense advertising network."

How is it "bad news"? Google isn't shifting money from AdSense to search; its payments to content partners are increasing, since there's been (and will continue to be) growth on both sides of the aisle.

I do think the content network will evolve in ways that favor some publishers more than others. Contextual ads work best as a direct-response medium when ads are targeted to the right audience, not just the right keywords, and that's hard to do on a general-interest site. For example, an ad for Canon's latest digital camera in a NEW YORK TIMES article on digital cameras probably doesn't pull as well (or convert as well) as the same ad on a review of that same product on a camera-review site. That's obviously one reason why smart pricing was introduced.

didn't someone just point out how adwords lets you set seperate bids for content vs. search? google keeps 100% of the search $$$, while we could potentially get less on the content end of it...

Sure, and publishers could "potentially" get more if competitors started nibbling at at Google's market share. In reality, some publishers are likely to get more, some are likely to get less, and some are likely to get the same as they're gettng right now. But why engage in idle speculation?

but i can almost understand why they did it.

It's pretty simple: They introduced separate bidding to make the "content network" more attractive to advertisers who have been clamoring for that feature since 2003.

Mike_Werner

5+ Year Member



 
Msg#: 12091 posted 2:13 pm on Feb 23, 2006 (gmt 0)

David,

That's what I was thinking, re-invest my adsense dollars to get more readers..;

Since you're investing in ads yourself, do you see the difference between your adsense and adwords $$? Or am I working this thing out badly?

hunderdown

10+ Year Member



 
Msg#: 12091 posted 2:33 pm on Feb 23, 2006 (gmt 0)

danimal, my understanding of that is that advertisers are making that choice, not Google. Or that the amount of available space on Google properties has grown faster than the amount of space on the content network.

In either case, we could take it as a challenge to provide more good content on which ads could appear, and which will tempt more advertisers to choose the content network.

labnol

5+ Year Member



 
Msg#: 12091 posted 3:20 pm on Feb 23, 2006 (gmt 0)

As a rule, Google pays out 50 cents of every dollar to partners - and can range up to the full dollar, depending on the size of the relationship.

<snip>

[edited by: engine at 3:26 pm (utc) on Feb. 23, 2006]
[edit reason] No blogs, thanks [/edit]

sailorjwd

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 12091 posted 3:23 pm on Feb 23, 2006 (gmt 0)

"Smart pricing is NOT an inducement to advertisers"

Here's an advertiser who loves smart pricing and it is likely the biggest reason I'm able to use the content network (and Adwords in general) and still make a profit. I can't make a profit using Yahoo/overture ads.

The adsense side of me hates smart pricing :)

europeforvisitors



 
Msg#: 12091 posted 4:06 pm on Feb 23, 2006 (gmt 0)

sailorjwd, do you have any idea what your average "smart pricing" discount was on content clicks before separate bidding was introduced? Did it vary much from day to day, week to week, or month to month?

ronmcd

10+ Year Member



 
Msg#: 12091 posted 4:15 pm on Feb 23, 2006 (gmt 0)

sailorjwd

why do you think your adwords costs on content have been reduced by smartpricing? Were you using content before and after smartpricing started? Ive been using adwords for years now, in a few markets, but over that time I have been involved in 1 competitive market continuously. And I have never ever seen any evidence that smartpricing is passed to advertisers as a discount. Nothing changed when smartpricing started, and nothing has changed since.

I can pay dollars per click and receive a couple of cents in the same market as a publisher, and from tracking I know a lot of the sites my ad appeared on were MFA sites, and would have been smartpriced. Whos got the money I paid to advertise on those sites? We all know the answer.

Smartpricing is a way to maximise googles revenue and was probably an attempt to dissuade spam and MFA publishers, although it was too late by then. It has nothing to do with adwords advertisers whatsoever, other than providing google an excuse for doing it.

ronmcd

10+ Year Member



 
Msg#: 12091 posted 4:22 pm on Feb 23, 2006 (gmt 0)

It must also be said that MFA sites do convert to some degree, certainly for my campaigns, which surprised me. But I would be very surprised if those sites were getting a decent cut of what I paid.

europeforvisitors



 
Msg#: 12091 posted 4:35 pm on Feb 23, 2006 (gmt 0)

Smartpricing is a way to maximise googles revenue and was probably an attempt to dissuade spam and MFA publishers, although it was too late by then. It has nothing to do with adwords advertisers whatsoever, other than providing google an excuse for doing it.

If that were true, wouldn't we have seen a hue and cry on the AdWords forum?

Also, I find it hard to believe that Google would be stupid enough to make fraudulent public claims that could be disproven so easily in a lawsuit.

econman

10+ Year Member



 
Msg#: 12091 posted 5:10 pm on Feb 23, 2006 (gmt 0)

Mike_W: WRT to the seeming mismatch between the amount paid per click and the amount received per click for the same keywords, keep in mind that CTR can have a big impact on the per-click amounts for both AdWords and AdSense.

If you are new to AdWords, you might be paying 50 cents per click, and your ad may be displayed next to ones by more experienced, successful advertisers, who are paying just 10 cents, because they have perfected the wording of their ads, refined their keyword strategy, etc.

So, you might be comparing an Adwords cost of 50 cents against AdSense revenue of 7 cents (70% share of a 10 cent per click payment). Given this comparison, you might get impression Google is keeping mot of the AdSense revenue, when it is not.

Take a careful look at the ads that are running on your site. Are they the exact same ones you are competing against in AdWords? Perhaps the AdSense algorithms think, for some reason, that your content should be matched against a slightly different group of ads -- perhaps ones that pay less per click but are anticipated to have a higher CTR with your content, and thus expected to yield a higher eCPM.

Needless to say, there is also a chance that the AdSense algorithms aren't doing a very good job matching your content to the appropriate ads, in which case some slight wording modifications to the content on your page might induce Google to send you a different set of ads -- perhaps ones with higher payments per click.

Of course, even the per-click amounts are in synch, you aren't likely to make money by participating in both markets.

To the contrary, it should be obvious that if you are paying 20 cents a click and receiving 14 cents a click you won't make much profit no matter how many visitors you pull in from your AdWords campaign! Actually, the loss could be much worse than you would think at first glance. If just 5% of the users you attract through AdWords end up clicking on one of your AdSense ads, you will spend $4.00 on AdWords and recoup around 14 cents from AdSense.

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