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|Google's Hidden Payroll|
Article: Adsense & publishers in developing countries
Christian Science Monitor is out with a story on the positive effect Adsense has had on publishers in developing countries. USA Today is also running the story.
|But it is Web entrepreneurs in the developing world who are reaping the greatest benefit from the program. |
Because Adsense earnings can vary widely depending on a site's traffic or subject matter, many Web publishers in the developed world don't bother participating. Whereas a $25 monthly payout may not be worth the trouble to a blogger in Manhattan, it can mean the world to a blogger in Manila.
|The company earned some $2.7 billion in Adsense revenues last year. Google refuses to disclose the exact percentage it pays out to Adsense member sites, but recent news reports have put that figure as high as 78.5 cents on the dollar. |
Google's Hidden Payroll [csmonitor.com]
That's a great story and I'm sure it'll help give some offline credibility to people when they say that they're a web developer and publisher, but the more widespread knowledge of adsense becomes the harder it will become for publishers (more competition)?
These types of stories always seem to catch the eye. What concerns me though is the way it is easy to paint an image with such a wide brush.
|Whereas a $25 monthly payout may not be worth the trouble to a blogger in Manhattan, it can mean the world to a blogger in Manila. |
The Philippines, especially in the capital Manila is just like any other major city in the world. To many US$25 means very, very little to others it does mean a lot, exactly as it does in Manhattan.
To also bring up figures like the average income in a developing or even developed country is extremely misleading.
In India, Thailand, and other parts of Asia are some of the richest people in the world. Many of the Middle Classes are growing rapidly and becoming richer.
After all to be able to use AS, you need a basic level of education, access to computers etc.
While I agree with the $25 comment above, the CSM story talks of a $1,000 a month example, where the guy living in India was able to quit his job and go back to school to further his education -- in many capital cities in the developing world $1,000 a month could pay the rent, generous living expenses and leave you with some loose change -- I doubt that would be the case in Manhatten.
$1000 pays for parking in Manhattan
Am a blogger and i also run a website too. As a matter of fact am from Nigeria.
The message posted above is quite misleading. I started blogging without knowing what Adsense is. I did not even paste their code on my sites until last year.
I basically do what am doing for fun, learning and most importantly to talk about the ills of the society i live in.
Getting an Internet connection to monitor a blog/website is not a small hassle.
You need to provide computers, power supply (using generators) which means buying fuel(gas), above all these you need technical, writing and coordinating skills to pull an online business off.
And when you take into consideration the fact that the people around you don't stay online for so long due to not having regular access to the Internet, you have to compete for foreign visitors (basically for your people that want to keep abreast of what's going on back home).
AdSense might seems like a huge cash cow to some, but to me i do what i do basically for fun, learning and most importantly for the emancipation of my fellow citizens from the hard-knock life we all face every single day.
>>> $1000 pays for parking in Manhattan
And we in the UK go to manhatten on transatlantic shopping trips because its so damned cheap. Seriously.
A 1000 dollars is 550 pounds. Same price as the guy who fixesd the loo charged me yesterday. And the same money my girlfreind earns as a newly qualified teacher each week. And thats not enough...
The top 20 most expensive cities to live in:
1 Tokyo, Japan
2 Osaka, Japan
3 London, United Kingdom
4 Moscow, Russia
5 Seoul, South Korea
6 Geneva, Switzerland
7 Zurich, Switzerland
8 Copenhagen, Denmark
9 Hong Kong, China
10 Oslo, Norway
11 Milan, Italy
12 Paris, France
13 New York City, United States
13 Dublin, Ireland
15 St. Petersburg, Russia
16 Vienna, Austria
17 Rome, Italy
18 Stockholm, Sweden
19 Beijing, China
20 Sydney, Australia
20 Helsinki, Finland
Source: Mercer Human Resource Consulting, 2005 Cost-of-Living Survey
Personally I am amazed Hong Kong and Singapore are not higher. Especially I would have thought HK would be higher than London - just on the price of beer and land!
[edited by: Visit_Thailand at 12:49 pm (utc) on Mar. 29, 2006]
Hey, I'm from Manila
Nitrous, you are right it is damn expensive to shop in Europe. The reason is that you have all of those euro-taxes like VAT, which we don't have in the States. If your governments would drop those taxes, then your shopping dollars would stay at home.
Re the developing world, it is true that $200 per month in the former Soviet Union is considered to be a decent salary. Of course Russia and the rest have their billionaires and Moscow is one of the most expensives cities in the world also. But $200 will still let the average young guy quit his job and work full time on his website. So I say that the story is really true.
|The reason is that you have all of those euro-taxes like VAT |
You have them too, they are just included in the price of the product.
Yes, there are some, but much less than in Europe. If that wasn't the case, I'd be coming to Europe to my shopping, rather than you guys coming here. The high prices aren't just because of the recent strength of the euro, either. Remember that the U.S. still has the 3rd highest per capita income in the world, but our prices on consumer goods are much lower than Europe's. High taxes account for the high prices in Europe. And, IMHO, also for the less than robust growth rates...but that's another story.
Wow, I think we might be starting an economics forum here! Let's get back to something less controversial like gigabits, or domains or something :)
|You have them too, they are just included in the price of the product. |
Not at 19 or 21 percent VAT like in most places in Europe. It's called sales tax in the US and ranges from 4.5 to 9.5 percent and differs by city which sets the rate. And many states don't charge sales tax for food items.
I've been living in Romania now for 3 years and you would think it's cheap here, but it's actually quite expensive. The only thing cheap here is booze, cigarettes and bread. Everything else: Processed food, electronics, cars, houses, apartments are all much more expensive then in parts of the US where I lived - and the Euro to Dollar ratio has nothing to do with it.
People here (Romania) are trying to make as much as they can as fast as they can and don't think of customers for the long term. Fleece them as much as you can today and give no thought to word of mouth advertising or long term customer relationships.
I don't know if it's that way in other parts of Europe.
Food may be cheap in developing countries but internet access is not. Most ISPs here charge for download per MB for broadband and they do not even have accurate billing software. So internet access is far more expensive here and electricity is also not available for 24 hours.
Here people use VSATs to access the Internet and pay $#*$!x per month for 128/32kbps can you all beat that when you pay just $40 to get 1MB download.
I believe it almost averages out to the same thing for everyone everywhere. Your typical US dollar value may go a longer way in most developing countries, but setting up a web business with AdSense as main avenue for monetization is vey much harder here as well.
To buy a PC in Manila would cost a typical professional at least 1 month's salary. Buying enough software to make it run will cost another month's salary. Connecting to the Internet via broadband can cost as high as 1/4 of your salary per month. Very few people can afford that. And those who do it for the sole purpose of making a blog and hoping to earn some AdSense income in the process are probably foolish. Those who can readily afford to do it are already in the upper hierarchy of society and has the abilities to earn above average incomes. And leaving a high paying job to work on an AdSense-geared site fulltime is downright ridiculous, at least in most cases. People who do it here are in a way, visionaries and dreamers.
Once the AdSense site is up, generating traffic sources that pay well is, typically, also harder if you are based somewhere in the third world. Local traffic value is next to nothing. Easy to generate but almost non-paying. You have to purposely target America and Western European traffic to get high paying ads. Advertising cost is paid in US dollars and can easily eat up promotional budgets in you are not carefull.
And when you are constantly churning out content while waiting for the site to become profitable, all these costs are eating up your bottomline fast.
Yes, my current AdSense earnings multiplied by currency advantages is considerable. But if you have to go through everything that I went through just to make my AdSense sites make some money for me, you'd understand why I deserve every single cent of it.
Well, to keep in line with the original article. My Romanian in laws earn about $200 to $300 a month which is more then enough to keep them going and higher then their previous salares before they were layed off.
Google Adsense has really made a difference in their lives.
Of course, the website's they own and earn $$ on were my ideas which I designed the template for. They did the rest.
Why does someone need broadband to maintain a web site? I was doing that long before I got broadband. Why does someone even need an internet connection? All content can be created offline and uploaded at an internet cafe or other public-accessible computer. And don't tell me people in these developing countries are using properly-licensed software!
Yes there are definite obstacles to be overcome, but let's not exaggerate them.
Barriers to overcome - The innate strength of a human to over come near insurmountable problems never ceases to amaze me.
One thing that seems to be missed is that, although the reported incomes for many people are really low, there's a large amount of business done in most third world countries that goes unreported. Bartering is rampant, and totally unreported. In many of these countries, you can't live on the wages you earn, so you have to trade and barter and be clever about the ways you use to support yourself.
It's incredible the difference in the cost-of-living for different countries. I make somewhere in the 25% tax bracket in the US, the government takes it's fair share, and I'm left with an amount that would make me rich in Romania (or some other place). Here, instead, it's almost the normal middle-income salary. Too bad I can't commute that far everyday.... ;)
I live in Romania but my income is in the top 10 percent for the USA. So I would be rich in either country if I wasn't so damn frugal.
|Not at 19 or 21 percent VAT like in most places in Europe. It's called sales tax in the US and ranges from 4.5 to 9.5 percent and differs by city which sets the rate. And many states don't charge sales tax for food items. |
In the U.S., there are imbedded taxes somewhere around 20-23% in the price of products. You can't see them like you can a VAT or a sales tax, but they exist. For a good explanation, read Neal Boortz's book on the FairTax proposal. Even if you don't support the FairTax concept, it's an interesting education.
25% income tax! How I envy you!
Last financial year I gave close to 48% of my income to the Australian Taxation Office. Thieves!
You did a good job, Freedom. You, therefore, deserve a cookie, make it two.
Ok ... let me also throw in my bit here.
First, I'm from Accra, Ghana. I got into Affiliate business about 10 months ago (part time) and I recently decided to do this full time.
I currently run 2 websites: one on cellular technology and services (that's my field), and a local news and gossip site. Even with the local site, 90% of the traffic comes from US/Europe.
To get to do this full time, I recently installed Internet connection at home. This is how the cost went:
Telephone line installation: $100
ADSL Modem: $90
Setup Fee: $200
Monthly Fee: $100 (for 256k/128k).
Plus VAT+NHI Levy(17.5%)
(Edit: Link to the ISP's site with the above charges: [internetghana.com...] )
2 comments here. First, it took me 6-months to get the telephone line installed, even though at the time, I was working with the telecom operator. There's just not enough capacity available.
Also, even though the 256/128kbps might seem fast enough on the surface, DSL is a shared service, and the contention ratio is so high that practically any voice communication is impossible. It really feels like dialup, and the only thing that's stopping me from switching to plain dial-up is the cost of the dialup service ($35 fixed, plus by-the-minute telephone charges).
But to me the most challenging bit is not the cost of doing business. The biggest challenge I face is the lack of a viable online payment system, as there are no credit / debit card services here that can be used for online purchases.
Bank transfer is too expensive and takes too long a time.
PayPal claims to be "Worldwide", but is only available in 55 countries. In fact, the only African country where PayPal is partially available is South Africa. I've tried other means ... and been taken for a ride twice .. but I'm yet to go over this hurdle.
Another consequense of the above is that I have to pay a minimum of $30 for every single Affiliate check that I cash at the local banks. Also, there are many great services that could earn me extra cash but which I cannot take advantage of, , either because of where I live, or because they only offer PayPal as payment method.
I also cannot buy needed services and tools (software, AdWords campaign, etc), to enhance and promote my business. This is really frustrating.
So with all these setbacks, the biggest benefit I personally derive from AdSense and the Affiliate model of business is not really the money. (Ok ... the money is certainly great ... but I currently don't earn as much as my last salary I took before getting online full time. If I may add, I'm a Telecom Engineering grad, and I've already worked with the 5 biggest companies in Ghana, including all the 3 telecom operators as a Cellular Network Planning / Optimisation Engineer).
Rather, it's the freedom it offers me. I can afford to be different and live my life the way I please. I don't have to be where everybody is, and I don't have to do what everyone else does. And that means a lot to me, more than anything else.
Just to provide a slightly different slant on this, one of the requests of Make Poverty History [makepovertyhistory.org] is trade justice.
Perhaps one of the beneficial side effects, of the increase in web publishing by those in developing countries, is that it involves commercial transactions that aren't subject to the same type of political shenanigans as other forms of trade. Hopefully, people who make money in developing countries will spend it much of it with local shops, suppliers etc., and thereby distribute the economic benefits locally.
<tongue only slightly in cheek>
So, Freedom, it's your duty to society to stop being so frugal and start going out and enjoying yourself - splash the money around and help your compatriots' businesses boom!
<tongue out of cheek>
Try making a website in a non-English language, for example: make a Chinese website, keep updating and promoting, make it liked by local people. How does it sound to you?
In 2003 I had to pay over $60,000 income tax for $$ I earned online in the email marketting biz. I was in my 20's and was not ready for a bill like that.. I had sell my BMW X5 to pay my income tax.. my email biz fell apart shorty after and I wnated to save all the $$ I could so I moved to back to my homeland Paradise Jamaica because I went to open a bank account while vacationing and I discovered if live in Jamaica and earn USA $$ coming from companies the USA or other contires.. I dont have to pay any income TAX to Uncle Sam or Jamaica. So I pay 0% income tax. My bank account in Jamaica does not have any social security number or any number of sorts ties to it... just my family name. The compaines who pay me from the net dont need a SS# beceuse the check comes to Jamaica.
I'm AdSense published from one developing country. In spite live expenses are less here then in USA I pay for Internet much more then in USA. I pay 70$ a month 256kbps down/64kbps up FLAT. Also I pay more for power electricity. So with 200$ a month I can barely cover expenses.
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