|Reasons why earnings may not rise with traffic|
Some answers to this frequent question
In almost every thread about income I see people wondering why when traffic rises, income doesn't match it. Here are a few reasons for why people may perceive this happennig:
1. You must be careful to look at unique visitors to see a clearer picture.
Adsense impressions count every ad block. Second and third blocks have lower paying/lower CTR ads. So your impressions may be up but the Adsense eCPM may be lower.
2. Banner blindness. Regulars get used to the ads. You should probably be seeing sharper declines in revenue, but the new pages and visitors actually mask this effect.
3. New pages get Adsense ads, but they may not be fine tuned until later.
4. Timing. Your high traffic days may not correspond to advertisers' preferred days.
For example, your site may have higher traffic on weekends (eg due to home users), but maybe your advertisers only want weekday traffic (business users). You see this in the stats as more traffic=less eCPM, but really it is weekend=low eCPM.
You can't just say, my traffic is up, my eCPM is down, therefore it is an adsense conspiracy. People are all too quick to make judgements about lower earnings. Of course, there may be some factors that don't allow income to shoot up instantly in line with traffic, but it's hardly a Google rule.
I usually just lurk here from time to time and am rather unknowledgeable regarding adsense; this posting has summed up some things very nicely, good job darkmage.
Makes Sense, forgive the pun :)
Take today for instance, a Saturday, my traffic is down 50% but adsense $ is about the same, so even though my Mon - Friday traffic is almost double of the weekend traffic, Adsense manages to keep up or even exceed, but when things do go wrong its at the weekend never a weekday, i been in it long enough not to get too concerned as i know by Monday things will be back on track
Or.....it could be that adsense does have an algo that reflects income to increases in vistors and adjusts accordingly. We really do not know one way or the other and all theories have some merit. All I can say is that after 16 months EPC has decreased for our market of ads. How or why this has occurred is I am sure, due to a variety of reasons...one which may or may not be Google directly.
Well, no. The thing about the four points above is that they are very real. You can see and test each one. The idea that Google puts on a cap is a theory that has no direct evidence - in fact, it barely deserves to be called a theory. It is just one of those crappy one-line explanations - people are looking for a lazy, simple reason where they can focus blame. Why accept a theory with no evidence when there are other factors that you can see?
Besides it doesn't make sense for Google to have such a cap policy. If Google caps your income, they are also capping their own. Why do this for rises in genuine traffic?
Plus there is a very obvious flaw in the logic. Many sites start off with a few thousand impressions a week, just to test Adsense. They then add AS to more pages over time all the way up hundreds of thousands or more. Guess what, their income also goes up by a substantial amount.
If you are so convinced of this cap, then turn off most of your adsense pages (or don't add adsense to new pages), replace AS with standard ads like fastclick. Since Adsense income is supposed to stay the same, you'll be ahead.
Well maybe...then again perhaps not:)
Lets discuss each of your points...one by one.
Banner blindness can be measured most effectively by CTR...which in our case with ad refresh and movement has increased over the time we have been in the program, so lets rule that one out.
We do not use additional blocks of ads. That doesn't mean that ads availibility and pricing effects are not seen, but we would expect to see some correlation between inventory and results?
Our experince with targetted ads is that google normally gets it closer in the short term after a page is posted then 3-6 months after the fact. Some of this is usually our pages are posted to current events happeniing.
You are right on the statment that our high days may not corespond to advertisers days. No way to prove or disprove that one.
As for you comment above about capping, I think you are missing the whole point of the "conspiracy theory". Is Google capping our average income to feather their own bed? They are actually increasing their share of the revenue stream at the expense of publishers.
As I noted above all the reasons etc can be discussed and each has its own merits. We just can't understand the reluctance of some to believe Google couldn't do what they have done twice previously....cut the effective EPC to publishers. It happened as a result of broad based ads last Novemeber and again with the Smart Pricing formulas in April.
Did they change the algo or just reduce the cost of ads to the advertisers....doesn't really matter...the end result is lower EPC. As has been noted previously we look at all the factors including impressions, CTR, EPC and effective CPM. We have already made the decision to remove adsense on certain pages with more traditional ads and have been happy with the results.
So in summary don't disagree with your comments they are all valid....just don't think you can rule out the obvious that our partner can also determine the results.
For me its also about WHERE the traffic is coming from.
Last week I had a link up from a major site which increased my visitors by 1000% for one day. Unfortunately my earnings barely doubled the norm that day. Why?
Well the site sent a lot of traffic but the traffic wasn't really targeted traffic like I normally get from Search Engines. I find search engine traffic is much more likely to click on an ad because they come to my site searching for specific information about a topic - usually because they want to buy something. So when they see an ad for the product they're more likely to click it.
The mega site's traffic was exciting to watch come in (and did ok with impression ads) but very few of them clicked on ads because they were in 'general surfing mode' and surfing into my site out of general interest - and not with intent.
I've noticed this trend every time I get a big link up - just a theory that might explain some of the anomalies that people notice when their traffic increases and their click throughs don't.
Many people saw an increase in March, sorry you didn't but there were many happy people at the end of it.
As An Adwords advertiser I pause accounts depending on various factors. So do many others. You can get an idea if this is happening with the adsense preview tool and channels. It takes a few weeks, but I see a definet variation. Also, clicks for me on the content netwrok are much cheaper than Search.
I am also talking about revenue, not CPC. My bank won't accept cheques with a CPC value, but they gladly take total dollars :)
Also, if you convinced there is a cap why not replace the adsense ads on your new pages with other ad networks?
And finally the reason I don't believe in the conspiracy is that I see no evidence of it.
darkmage, good post. There are couple of other points, like the "location of visitors "one raised already, sources of your traffic would be another. What competing offer I have on my site also affect both the ads shown on my site and the CTR.
There is no conspiracy though.
|It happened as a result of broad based ads last Novemeber and again with the Smart Pricing formulas in April. |
Agreed. But it does not happen on a week by week, or publisher by publisher basis that some here claim. Changes are an essential part of doing business on the web. Adsense would be remiss if it did not keep making changes with a view to improving the overall program. Some may lose and some may win. In March this year (April?) some publishers saw their earnings jump.
|Is Google capping our average income to feather their own bed? |
Hmm. There is no evidence of course but I look at the influencing factors. Adwords advertisers are not exactly being treated like gold. Google is advertising for more publishers. There are other points suggesting that if Google wants more of anything, it's publishers they want. They'd hardly be likely to try and upset the existing ones.
I think you are missing one other possible explanation, which may actually be two: fewer AdSense advertisers, and/or those that remain bidding lower because of lower conversion.
Not one to immediately discount a good conspiracy theory, I still remain open to the possibility that Google is, over time, taking a bigger piece of the pie and leaving a smaller piece for us. If it's happening, however, I doubt it is a capping system, but rather a changing percentage over time across all publishers.
Can't disagree with that m:)
Like I said all make valid points, each with merits as an explanation. But I do not accept the the possibility that google is not also directly responsible in adjusting revenue streams.
Seems that many here are blindly accepting that this is not the case....so I guess I am the paronoid one in the bunch.:) (every board needs one I guess...lol)
The market is expecting growth in revenue this quarter and since the revenue stream vs costs is directly related to adsense it sems only logical for google to maximize this area of their business. I know that we will have an opportunity to compare the overall percentage payouts in the next revenue report. Until then it's all a theory.
|Seems that many here are blindly accepting that this is not the case |
The only thing I can say is that if it is the case it is not applying to every publisher.
|.....it could be that adsense does have an algo that reflects income to increases in vistors and adjusts accordingly.....Visi. |
I have also said that myself and suspected it to be so. It may be a bit far fetched but think it is a real possibility. Perhaps they feel if you have more traffic success then you do not need so much epc but the smaller guy needs some help with a better epc?
Perhaps it is not so far fetched afer all? It seems like we work harder and harder but are always running into the wind and making little headway. Sure would be great to have the wind at our back for a change!
If this cap is there (which I don't believe it is), I am still very interested into why people keep adding adsense to new pages. Why not use an alternative for these new pages. If there is a cap, your total new earnings should increase.
I think that nobody has any real confidence in this cap theory.
>In almost every thread about income I see people wondering why when traffic rises, income doesn't match it.
Where? Where? Where?
Income is always proportional to traffic. To suggest otherwise is obsurd.
Okay if you have 90% market share it can be hard to covert the last 10%.......but not impossible!
I don't buy into this post for a single second. If you do then good luck to ya!
In the short time (10 days) since we started trying adsense. I have seen a STEADY drop in the one figure which GAdsense DOES NOT report on their online reports and that is the average payment per click! This is the "your earnings" column divided by the "clicks" column. Wonder why they don't make this very important (at least to us) figure more easily accessible. In just ten days, as we increased the number of pre-existing pages carrying ads and the number of impressions and the number of clicks has almost doubled, I've seen this figure drop over 50% even comparing page to same page over that time (as well as sitewide).
Our board has already made the decision to automatically alternate ads on the same page between G and a couple of the other similar services to compare this "phenomena". Will let you know in a couple weeks.
One more thing is repeat visitors. If you are posting stuff like news etc everyday. People might just come check out whats new and close the window or go to other site directly. They will be used to the ads.
I'd like to mention one more thing which darkmage touched on in the opening post but which may not be intuitive to all, and may help explain the apparent increase in traffic without an increase in earnings. It concerns UNIQUE visitors. We've just started using GAdsense, but have been serving PPC ads in many varied formats for over 5 years. Consider a very simple hypothetical page with ONE ad unit which is doing really well. Assuming you've set it up on it's own channel, let's say it shows:
Impressions clicks CTR CPM earnings
1000 100 10.0% $50.00 $50.00.
So you decide "aw what the heck, if it gets that good of earnings with one unit maybe I'll add a second unit and those visitors who didn't find what they were looking for in the first ad unit might find it in the second". At least I'll make a little SOMETHING extra.
Well, since GAdsense (should that be pronounced: Gawd-sense? :) counts EACH UNIT as an impression, and assuming you make the common lazy mistake of adding the second ad unit using the same channel code as the first, adding that extra unit doubles the APPARENT impressions (but not, in our example, the unique users) but the rest of the stats APPARENTLY drop precipitously, to something like:
Impressions clicks CTR CPM earnings
2000 110 5.5% $26.00 $52.00.
In REALITY you've made a whopping $2.00 more by adding a second unit, although it appears you've doubled your traffic (which you haven't, it's still the same 1000 visitors). Do the math. We've credited a 10% increase in clickthrus to the second ad unit, which is reasonable based on experience. As previously mentioned the second unit is almost certainly lower bidding ads, so the extra 10% clicks (off of 100% more impressions) do NOT produce 10% more income even though you showed more clicks. In fact in some real-life cases we had the relative earnings go DOWN, presumably because a lot of the people who WOULD have clicked on the first ad unit, found a better fit on the second ad units and left via a 'cheaper route'. More about this in a moment. Finally you have to consider, in this scenario, people clicking, who don't find what they are looking for and come back using the back button. They ALSO apparently generate some additional impressions as far as GAd is concerned, thus further increasing impressions without increasing the rest of the stats. So as originally mentioned don't fall into the "self-inflicted more impressions trap", Ideally you should add the second ad unit using a spearate channel, at least initially, to make it easier to track what happens to each unit's productivity. You also need to make sure you're looking at UNIQUE users before assuming your earnings numbers are skewed down. The best way to determine uniques (until G decides to provide it on the reports) is of course via your own logs.
With one ad unit (asuming all 4-ad units here) you have to look at your avg exit fee to be the avg of the top four bids (say 1.50, 1.49, 1.36, 1.30 = 1.41, all things being equal), while the avg exit fee for two ad units (depending on the visibility of each) is the average of the top EIGHT bids (say 1.50, 1.49, 1.36, 1.30, 1.25, .90, .75, .10 = 1.08). So unless the 23% decrease in avg exit fee resulting from adding the second ad unit is made up by increasing the number of ad-clicking happy campers by 23% it may be more advantageous to simply use fewer ad units. Has anyone come up with what they feel is the ideal number of ads/units? Has anyone tracked the number of visitors who RETURN from clicking ads, perhaps to click another or visit other places on their site?
Finally, if you do add extra units be sure the first one (code wise) is more visible, so that visitors see it first as it generally has the highest paying ads.
Couldn't agree more with the above post...that's why one of our key evaluation tools is earnings/unique visitor.
I have been looking at a few trends, particularly on newly added pages, and in light of visi's earlier post (msg 11) I had an observation.
It appears to me that, IF G is indeed using past clickthru data to determine future ads for a particular page, then they seem to be optimizing on the number of CLICKTHRUS rather than INCOME or effective CPM. I have observed what appear to be excellent ads, with high CPM and decent clickthru rates, suddenly being replaced with more off-topic ads, with much lower CPM but higher CTRs. I've ruled out the ad accounts running out of money or pulling their ads from our site unless they can do so on a page by page basis. Is it that their algorithm is short-sighted and only optimizes for CTR ASSUMING the rest will follow? Is this simply an innocent all-out effort to optimize ad appropriateness (theoretically directly proportional to CTR) to the detriment of all else, like our profits? Or could there be some other unknown reason like increasing their own click results numbers for shareholders? What other benefit could they possibly see from higher clickthrus, but lower revenue.
Their policy of delaying channel results 24-48 hrs and not reporting which ads are actually getting clicked on makes it much more difficult to accurately messure unit productivity and optimize pages than it could otherwise be.