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AdSense payout percentage: 68% to AdSense publisher, 32% to Google
It has been declining over time..
blaze




msg:1386383
 8:47 pm on Apr 29, 2004 (gmt 0)

Corrected..

year end 2002 it was 88% to AdSense publisher (12% to Google)

Quarter end, march/2003 it was 82% to AdSense publisher (18% to Google)

year end 2003 it was 77% to AdSense publisher (23% to Google)

Quarter end, march/2004 it was 76% to AdSense publisher (24% to Google)

This is assuming a payout of 91M, 69M, 504M, 262M and a pocketing of 12M, 15M, 144M, 82M respectively to the dates above.

More info at F9 /
[sec.gov...]

[edited by: blaze at 9:55 pm (utc) on April 29, 2004]

 

John_Caius




msg:1386384
 8:57 pm on Apr 29, 2004 (gmt 0)

Didn't Adsense launch in June 2003? Am I missing something here?

blaze




msg:1386385
 9:01 pm on Apr 29, 2004 (gmt 0)

Not according to the s-1. Presumably AdSense means more to Google than just joe-random content partner. 2002 probably included deals with AOL, etc.

Google AdSense is the program through which we distribute our advertisers’ text-based ads for display on the web sites of our Google Network members. Our AdSense program includes AdSense for search and AdSense for content. AdSense for search, launched in the first quarter of 2002, is our service for distributing relevant ads from our advertisers for display with search results on our Google Network members’ sites. AdSense for content, launched in the first quarter of 2003, is our service for distributing ads from our advertisers that are relevant to content on our Google Network members’ sites. Our advertisers pay us a fee each time a user clicks on one of our advertisers’ ads displayed on Google Network members’ web sites. In the past, we have paid most of these advertiser fees to the members of the Google Network, and we expect to continue doing so for the foreseeable future. We recognize these fees, net of the portion we pay our Google Network members, as revenue. In some cases, we guarantee our Google Network members minimum revenue share payments. Members of the Google Network do not pay any fees associated with the use of our AdSense program on their web sites. Some of our Google Network members separately license our web search technology and pay related licensing fees to us.


Fiver




msg:1386386
 9:16 pm on Apr 29, 2004 (gmt 0)

Does anybody know how this compares to other affiliate programs? Not that many ppc anymore, but I'm curious.

Freedom




msg:1386387
 9:24 pm on Apr 29, 2004 (gmt 0)

I hope future stockholders don't demand that Google take a bigger share. Many publishers already got bit on April 1st.

ogletree




msg:1386388
 9:30 pm on Apr 29, 2004 (gmt 0)

That has nothing to do with normal adsense as we know it. Anybody that knows much about adsense knows that Google gets a lot more than we do. This is just for their big customers like AOL.

That really makes a lot more since now. Aol and citysearch must be getting tons of money off of adsense.

loanuniverse




msg:1386389
 9:32 pm on Apr 29, 2004 (gmt 0)

Guys: They seem to be defining adsense as inclusive of the big sites in the Google network {aka: AOL search}. Take the split with a grain of salt. Some of the big deals might include a payout to those sites in excess of what Google is taking in from the advertiser {ie: guaranteed payment amounts}. They allude to this arrangments in some of the writing included in the S-1.

The reason why it has gone down is because of us.... I have to read some more, but the previously published educated guesses of 60% might be correct. Also I believe them when they said that it was not a percentage adjustment, but a whole pricing adjustment in April 1st. lying would be evil, and they even include that in the S-1 {which I thought it was pretty funny, not funny HAHA, but funny pleasant grin}

Darn, I am sounding more like a fan than a partner.

blaze




msg:1386390
 9:33 pm on Apr 29, 2004 (gmt 0)

I doubt it. AOL probably gets more like 80-90%. Pretty sure that hasn't been declining over time :)

Still, I must say what surprised me was not the payout, but rather the fact that it is declining over time.

This kind of pricing control means that the situation is ripe for competition. Plust the profit potential is obviously huge.

I think Yahoo has stayed out of this space because they don't want to fund their competition. By paying money to companies to build great websites then they are simply giving money to build better portals then what they have built.

But you'd think with all this money on the table Yahoo would rethink their strategy and try to compete one on one with Google. With overture, they really are the only company that is in a position to do so.

However, I guess, I can really see MSN moving into this space. The only problem is that they don't own an overture, but at least they don't have the problems that Yahoo does, who is an internet pure play.

I think we could see MSN rabidly gobbling up all the 2nd/3rd tier PPC engines. Or maybe we could see value click moving into this space.

Whatever the case - watch out: exciting times ahead!

loanuniverse




msg:1386391
 9:50 pm on Apr 29, 2004 (gmt 0)

Blaze where do you get 68%? I finally got to that part and I read it as follows:

Adsense Revenue recognized on first Qtr. 2004 = $82.2MM
Unrecognized fees paid to network members = $262.6MM
Total Adsense revenue = $344.8MM

Percentage payout = $262.6MM / $344.8MM = 76.2%

blaze




msg:1386392
 9:53 pm on Apr 29, 2004 (gmt 0)

Good point, my bad - updated numbers are 88%, 82%, 77%, 76%..

contentsiteguy




msg:1386393
 10:05 pm on Apr 29, 2004 (gmt 0)

It is a well known fact that google's large Adsense search partners like AOL get a higher percentage than content publishers like us. The number of partners like AOL has stayed relatively the same while content publishers signing up for adsense are increasing every day. Therefore, it makes since that as time goes on the overall percentage google pays out to Adsense will decrease over time even though OUR percentage hasn't decreased at all. In fact, it could have increased and you would still see a decrease in the overall percentage.

This is a prime example of taking statistics and using them to make incorrect conclusions.

blaze




msg:1386394
 10:10 pm on Apr 29, 2004 (gmt 0)

This is a good point that you make, however I think you are getting a little ahead of yourself to assume that I was declaring anything other than that the over all payout was declining over time.

I had no thesis except an observation of the facts. Your thesis is that you believe that that payout to joe-random content partners has been relatively steady.

Fair enough, it's an interesting idea however based on the facts in the S1 you can't conclude that.. Obviously you are judging this from something else that you don't care to make reference to.

[edited by: blaze at 10:11 pm (utc) on April 29, 2004]

markus007




msg:1386395
 10:11 pm on Apr 29, 2004 (gmt 0)

AOL earned 200 million and recieved a 80%, ask jeves earned 30 million i believe it was, with a similar split for last year. Just filter those out.

contentsiteguy




msg:1386396
 5:04 am on May 5, 2004 (gmt 0)

Blaze, while you may not have intended it, I am fairly certain most "Joe Publishers" reading your title, description, and post will assume Google has slowly been decreasing their payout percentages. I'm not attacking you, but just clearing up what could be misinterpretations of the facts by others who may take this thread and the facts presented and wrongly argue that Google has been decreasing payouts to publishers over time.

willybfriendly




msg:1386397
 6:01 am on May 5, 2004 (gmt 0)

Well, looking at the past month, there has indeed been a reduction in payout for me. Thirty days begins to establish a pattern. I am seeing significantly less per click. Ads haven't changed all that much. Click through stays about the same. Adwords are being bid at a fairly consistant level. Ergo, payout is less.

WBF

Jenstar




msg:1386398
 6:13 am on May 5, 2004 (gmt 0)

AdSense was around before the April 2003 premium publisher launch and the June 2003 regular publisher launch, both as beta and for search partners.

The payout percentages could be correct. The problem is not knowing what keywords are triggering the ads on your pages - if your EPC is $1, the split would be very poor if the triggered keyword ad has the advertiser paying $5 for it. But in the same respect, it could be that an advertiser is paying only $1.20 for that click, which would mean the publisher is earning a significant piece of the pie.

The problem is that Google doesn't tell us, so without knowing if it is a pricey single keyword ad being clicked on or a significantly lower paying multi-keyword ad, we won't be able to know the true percentage split between Google and the publisher.

Then there is always the theory some have that there is some sort of sliding scale being used to decide what percentage the publisher gets.

blaze




msg:1386399
 6:36 am on May 5, 2004 (gmt 0)

contentsiteguy, I didn't say you were attacking me (you don't even know me). I said you were getting a head of yourself in assuming that the observations above were implying anything other than the obvious.

You're also getting ahead of yourself assuming your interpertation of the facts are correct .. personally, I must admit if someone put a gun to my head I'd go with your theory (it's a good one) but it's just that - a theory.

In other words to say the above is obviously wrong (which it's not, it's just a strict observation) and what you have to say is obviously correct (while interesting, isn't necessarily true) all seems kind of ironic in the end, no?

dhaliwal




msg:1386400
 6:41 am on May 5, 2004 (gmt 0)

well you say its 68 % to the publisher?

I am sure its less than that

I am also sure that everyone has seen a 2 cents click in his account at some moment while checking stats?

If you have seen that than it means that for a minimum 5 cents clicks, the big G takes 3 cents and gives you 2 cents

so the percentage is? 40 % to us and 60 % to Big G.?

what people got to say!
i wish it remains at 70 % for us

MarkHutch




msg:1386401
 6:48 am on May 5, 2004 (gmt 0)

Our income is up since April 1st. For years, Google has rewarded good content on websites. Many here have followed that model and have found success in Google searches for years.

Then there was the PR deal where many people looked for high ranking website to link to them, so their domains would increase in PR and eventually in the results.

Now that Google has grown up, they are looking for sites that have good content, PR and the potential for profit for their company. This makes sense to me, but like I said we are up in revenue since April 1st.

Nothing ever stays the same in this world. I don't think Google is any exception. In my view you just ad another condition to the previous mix.

Good content
Good PR
Good potential for making Google $$$

I just wanted to add my speculation to the many others I've been reading in this thread.

nyet




msg:1386402
 12:21 pm on May 5, 2004 (gmt 0)

You all seem to assume that all of what goes to google is profit. They have costs.....the percentage going down makes perfect sense. As there are more adsense publishers, the costs of servicing those publishers goes up and each publisher is less 'important' and more of a commodity.

Supply and Demand - more publishers means a 'glut' of supply, when that happens the price goes down.

The new Smart Pricing scheme lowers the CPC for advertisers automatically. Why would G do this? You lower prices when your cost is less (Google's) to attract more customers.

With 'Smart Pricing' I would expect the overall percentage to go down more as G gets more efficient in separating good publisher sites from weak ones. There will be winners and losers, probably more losers than winners. (present company excepted, of course)

europeforvisitors




msg:1386403
 1:15 pm on May 5, 2004 (gmt 0)

Well, looking at the past month, there has indeed been a reduction in payout for me. Thirty days begins to establish a pattern. I am seeing significantly less per click. Ads haven't changed all that much. Click through stays about the same. Adwords are being bid at a fairly consistant level. Ergo, payout is less.

Another variable is "smart pricing," a.k.a. a sliding scale of discounts for advertisers based on Google's assessment of how your clicks will convert. If the advertiser is receiving a discount from the bid price, there's less revenue for both Google and the publisher. Less revenue = lower earnings, even if the payout formula hasn't changed.

Supply and Demand - more publishers means a 'glut' of supply, when that happens the price goes down.

It's impossible to talk about a "glut of supply" except in the most general terms, because there will be always be too much inventory for some keywords and not enough for others.

contentsiteguy




msg:1386404
 1:17 pm on May 5, 2004 (gmt 0)

Blaze, I never said that google hasn't been decreasing payout for publishers. They may or may not have or they may have been even increasing payouts for publishers over time. What I AM saying is that you cannot take the information they published in the filing for the IPO which shows that the overall Adsense payout percentage has been decreasing to prove that google is decreasing payout rates for publishers.

Also, you are calling what I said a "theory" but it's not. It is a simple mathematical FACT. Google initially started Adsense with the bigger publishers like AOL who they individually negotiated payout rates of 80% or more with. When they opened Adsense up to smaller publishers like you and I, the payout rate was considerably less and probably around 60%.

Over time as more and more publishers like you and I sign up, the number of publishers and therefore proportion of Adsense revenue from 60% publishers is increasing relative to the number of and revenue from 80% publishers like AOL and will continue to do so. Therefore the overall payout percentage will continue to move toward the 60% level even if google NEVER changes the payout rate. That's a FACT.

Again I never said that they weren't decreasing the payout rate, only that you can't use the fact that the OVERALL payout percentage is decreasing to make that argument.

[edited by: contentsiteguy at 1:30 pm (utc) on May 5, 2004]

contentsiteguy




msg:1386405
 1:27 pm on May 5, 2004 (gmt 0)

well you say its 68 % to the publisher?
I am sure its less than that

I am also sure that everyone has seen a 2 cents click in his account at some moment while checking stats?

If you have seen that than it means that for a minimum 5 cents clicks, the big G takes 3 cents and gives you 2 cents

so the percentage is? 40 % to us and 60 % to Big G.?

what people got to say!
i wish it remains at 70 % for us

Prime case of a misinterpretation. Blaze wasn't saying that your payout rate was 68%. It's less than that because that's only the overall rate and the large premium publishers with a higher payout rate skew that overall rate upward. I can say that I have never heard of any publisher seeing a 2 cent click.

nyet




msg:1386406
 1:45 pm on May 5, 2004 (gmt 0)

I think that the Smart Pricing program bespeaks :
"glut of supply" .... in the most general terms

hard to see it otherwise....

aravindgp




msg:1386407
 2:15 pm on May 5, 2004 (gmt 0)


"I advertise in Adsense as well."

Overtime I have reduced my price on content search, the more I browse the more worried I get as advertiser since there are sites which contain nothing but adsense, example a two page site.I get scared when I see them , since I cannot see where my add appears it's more likely that I make judgement on what kind of sites are displaying adsense.

This happens when I browse the internet, so I think the reduction in payouts is also due to advertisers becoming smart and reducing the pricing on their ads.

The click volume on adsense is very large at times and also the impression volume, usually the CTR is very very low almost negligble.Hence I keep my CPC almost to bare minimum.

I belive payouts being less can be attributed to this fact as well.

europeforvisitors




msg:1386408
 2:16 pm on May 5, 2004 (gmt 0)

Nyet, it isn't that simple. Contextual ads aren't a commodity the way run-of-network banners are. So you can talk about a "glut of supply" if you want to, but that's like saying there's a "glut of supply" in the commercial real-estate market when, in fact, there may be too many vacant suburban office parks but not enough Class A office space downtown.

europeforvisitors




msg:1386409
 2:22 pm on May 5, 2004 (gmt 0)

This happens when I browse the internet, so I think the reduction in payouts is also due to advertisers becoming smart and reducing the pricing on their ads.

Let's not confuse "payout" with "revenue." "Payout," as the term is used in this forum, refers to the formula that Google uses when sharing ad revenues with the publisher.

Let's say, just for the sake of discussion, that Google is using a straight 50/50 split with publishers. If a site generates $100 a day for Google, the publisher will get $50. If revenues drop to $50 a day, the publisher will get only $25. The publisher's earnings have dropped, but the payout (the 50/50 split) is unchanged.

Jenstar




msg:1386410
 2:48 pm on May 5, 2004 (gmt 0)

The other thing to consider is that with the new payment structure, that some ads are worth more depending on many different factors.

In this thread [webmasterworld.com] (msg # 108), a member said an Adwords rep made the following statement with how it worked.

Let's say there are 10 factors that determine the whether an ad should be displayed on an AdSense page...

If the ad hits 8 out of the 10 factors and is displayed, the cpc to the advertiser is 80% of the norm. If the ad only meets 3 of the 10 factors the cpc to the advertiser is 30%.

Google is not keeping the difference for themselves, the lower cost is passed on to the advertiser.

That could also possibly result in a 2 cent payout to the publisher, while still earning a larger percentage of the AdSense pie than Google does.

I think it is a situation where we can all speculate, and provide evidence we have, but we'll still never really know.

nyet




msg:1386411
 3:39 pm on May 5, 2004 (gmt 0)

EFV,

You can slice and dice the 'supply' any way you wish, but because the price is either coming down or staying the same, there is 'extra supply' someplace. *All* of our content campaigns have a reduced average CPC since smart pricing took effect.

In *any* marketplace for *anything* when the average price comes *down* it means one thing!

Taking Adsense -- as a whole -- it is -- as a whole -- commanding a lower price

IMO, this means an oversupply.

loanuniverse




msg:1386412
 3:50 pm on May 5, 2004 (gmt 0)

Nyet: I don't think everyone is suffering from a lower EPC. I am also certain that some of the people getting higher EPCs are quiet. Just an idea.

This 55 message thread spans 2 pages: 55 ( [1] 2 > >
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