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Google AdSense Forum

When AdSense sneezes, the Internet gets a cold.
Payment delay probable cause of collateral damage.

10+ Year Member

Msg#: 1247 posted 1:24 am on Dec 13, 2003 (gmt 0)

First I noticed I was running through dollars on ppc engines more quickly. My low bids were becoming higher bids and I was getting more clicks. PPC advertisers who were spending more than me per click were diminishing.

Then I noticed low bids I had on AdWords that had never been high enough to be shown on content sites were getting content site exposure. Lots of it. AdWords advertisers who had been spending more than me per click were also diminishing.

Then I saw the earnings per click for AdSense on my content sites drop by 50% and then by %50 percent again. I am now earning 85% less per click than I was four days ago, which had been previously consistent for more than two months.

At least one common denominator of PPC advertisers pulling out, AdWords advertisers pulling out, and AdSense dollars collapsing might be the missing AdSense payments.

It's likely the average AdSense publisher was not taking all his money to the mall. He was re-investing part of it in building his online businesses, until the rug was pulled out from under him.

For me, it's a wash. I'm getting cheaper traffic to my ecommerce sites (higher "Return On Investment") while the money to my content sites from AdSense has plunged below the profit level and no longer breaks even with bandwidth costs.

For Google though, it must be a one sided downward spiral of lost revenue on a grand scale. The missing AdSense payments aren't being funneled back into AdWords, so AdWords volume drops. The reduced bidding pressure means AdWords top prices drop so the advertisers (who still remain) pay less per click. The lower click prices manifest in lower per click earnings to AdSense publishers while the lower volume creates more public service messages, reducing per click averages for publishers even further. And any AdSense publishers who were using ppc or other paid marketing to drive traffic to their content sites have in many cases probably pulled the plug for lack of money, resulting in fewer Google page views.

Even when checks show up, the revenue dive won't necessarily automatically correct itself. Many publishers and advertisers, having been burned once, will need multiple consistent payouts before they rely on Google payment terms again.

I do not believe Google will profit from the payment delay by way of accrued interest earnings. Rather, I suspect when all is said and done, the payment delay will have cost Google a staggering sum of money.



10+ Year Member

Msg#: 1247 posted 1:32 am on Dec 13, 2003 (gmt 0)

Personally I think that if Florida doesn't bring back all the sites it dropped we will see far _more_ companies using adwords to bring back their income.

Time will tell. Nice post :)



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

Msg#: 1247 posted 1:52 am on Dec 13, 2003 (gmt 0)

I don't think the payment issue is having that much of a spiral effect. It is also the holiday season - we are just passing the time when online orders can be shipped to arrive in time for Christmas. I have reduced my own PPC until after the holidays, and I know of others who have done the same, or even paused campaigns. This would contribute to a drop in EPC.

I have not had any major drops in EPC like the ones you are reporting, though, but my industries are generally unaffected by the holidays.

<added>I also agree with Simon, I suspect we could see an influx of advertisers after the holidays, depending on whether they are happy with where their sites stand post-Florida update.</added>


10+ Year Member

Msg#: 1247 posted 4:40 am on Dec 13, 2003 (gmt 0)

Interesting post karatekid. I am one of those AdSense publishers that is reinvesting in my business by purchasing more traffic through AdWords. And yes, this week I have had to pause my AdWords account because I have run out of money waiting on the G check.

But I wonder just how many AdSense publishers are doing what I am doing.

I have not seen the reduction in CPC that you are speaking of. I would also tend to attribute the reduction you are seeing to the holidays. In my industry I would expect CPC's to go down because folks are to busy focusing on the Holidays but that is not the case.

Nevertheless, additional accrued interest can not be worth the negative PR associated with this delay. I think this was an innocent hickup with a relatively new system. Imagine the scope of what G has to do. Thousands of checks destined for thousands of publishers in hundreds of countries. I would think it would be an accountant's nightmare. Though it is inconvenient for all of us, we must be patient as G moves through uncharted waters.

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