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Why is decline in EPC and Income is ongoing?
trader

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 5446 posted 5:41 am on Mar 2, 2005 (gmt 0)

Our income and EPC (vs clicks/impressions) has been on ongoing decline for ages. Both ad impressions and clicks (and traffic) getting better on a regular basis month after month but EPC appears to be declining on a more or less regular basis (with occasional bright times. i.e. all of January, except last 4-days of Jan), but overall steady declines vs uptrending impressions and clicks.

As a real time example, Monday is often the best day of the week for my sites but February 28 was the worst Monday income and EPC day in ages. But our traffic was near record levels. Similar situation last Sat too with dismal EPC and revenue.

I have also noticed an all time high record number of PSA's. But had 'good' targeted ads on many sites for a long time but recently the same sites have far more PSA'S than normal.

After a noticable decline from Jan 28 thru about mid-Feb there was a fairly nice improvement for a while (about mid-month) but lately its back off the cliff again!

Anyone else notice this dubious long term (since 2003) and also short term trend (starting about Jan 28 2005), especially past several days? Any ideas why this happens? Has G possibly reduced its payout percentage? Does G perhaps have less advertisors which may be why there are so many PSA ads?

Could this be related to allowing 3 ad units on each page (and more and more of us doing that) vs the past where there was a limit of 1? Has that caused a double whammy of a reduced ad inventory and also caused lower bid prices, resulting in a significant increase in PSA's?

Of course, as a long time (well satisfied and very happy with G) publisher we are extremely worried about this trend. Nothing we do as far as making our websites better, good products/services, content targeting, getting improved traffic and good ad layouts/colors, seems to stop the ongoing decline. Any feedback would be appreciated.

 

jetteroheller

WebmasterWorld Senior Member jetteroheller us a WebmasterWorld Top Contributor of All Time 5+ Year Member



 
Msg#: 5446 posted 6:57 am on Mar 2, 2005 (gmt 0)

Look on Your check numbers.

Look on the difference at Your check numbers every month. This gives an idea about the number of AdSense publishers.

I noticed also many big players like the online editon from big newspapers have suddenly AdSense.

Basic concept of price is offer and demand.

jetteroheller

WebmasterWorld Senior Member jetteroheller us a WebmasterWorld Top Contributor of All Time 5+ Year Member



 
Msg#: 5446 posted 4:07 pm on Mar 2, 2005 (gmt 0)

When I look on prices for WLAN routers, notebooks, harddisks, digital cameras, I think we AdSense publishers can be very happy about the only small price decrease.

OptiRex



 
Msg#: 5446 posted 5:31 pm on Mar 2, 2005 (gmt 0)

I think we AdSense publishers can be very happy about the only small price decrease.

I don't feel that a 33% reduction last month, and so far in March my EPC is 50% down on a previously solid site, thefore this is not a "small price decrease".

This is horrendous and I am already looking at alternatives to Adsense since I do personally know many of my advertisers and they "claim" to be paying the same.

Someone is not telling the truth.

jetteroheller

WebmasterWorld Senior Member jetteroheller us a WebmasterWorld Top Contributor of All Time 5+ Year Member



 
Msg#: 5446 posted 5:36 pm on Mar 2, 2005 (gmt 0)

[ I don't feel that a 33% reduction last month, and so far in March my EPC is 50% down on a previously solid site, thefore this is not a "small price decrease". ]

I have many different sites with hundreds of pages and different ads on it.

I see the up and downs of the different sites.

So I see only a small decrease of EPC over all my AdSense time.

OptiRex



 
Msg#: 5446 posted 5:51 pm on Mar 2, 2005 (gmt 0)

I have many different sites with hundreds of pages and different ads on it.

Well, I have in excess of 100 sites running Adsense on several thousand pages. My monthly Google Page Impressions obviously run into hundreds of thousands, and I have just checked my "All time" statistics and I am HORRIFIED!

I am in a specialised widget area, my clicks are up substantially, my click thru rate is up, my earnings are collapsing meanwhile:

Google earnings up...
My Adsense publisher earnings down...

Someone needs to advise what is going on since something smells.

Jon_King

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 5446 posted 6:01 pm on Mar 2, 2005 (gmt 0)

I agree. We dropped from approx $20 CPM to $5, nothing changed and even the same Adsense advertisers are displayed. More clicks and less pay indicate my site is not as valuable to G and advertisers as it once was (or perceived to be). It's now been at these lower levels long enough for me to think that it's going to stick. I think we are experiencing a roll-back in pricing to Publishers i.e. Smart Pricing. The Adsense boom is over.

[edited by: Jon_King at 6:06 pm (utc) on Mar. 2, 2005]

ken_b

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



 
Msg#: 5446 posted 6:06 pm on Mar 2, 2005 (gmt 0)

My experience is that some channels have beenpretty much devastated on and EPC/eCPM basis.

Others have held up fine and even increased.

There are more of the former than the latter in my case.

Still, going back to before the hoilday bump February turned out better overall than October.

Jon_King

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 5446 posted 6:23 pm on Mar 2, 2005 (gmt 0)

ken_b you described the situation well. The drop in EPC is on some channels but not all. The high dollar channels and high traffic channels were hit worst, leaving middle income channels unchanged or even up.

Paris

10+ Year Member



 
Msg#: 5446 posted 6:41 pm on Mar 2, 2005 (gmt 0)

Opti, you pretty much answered your own question. If your clickthroughs are up and your earnings are down it is basically one of two things:

1. The sponsors are paying less for those clicks

Or

2. Google is paying a smaller percentage to its publishers

My guess -- and it's stricly a guess here -- is that it's a combination of both.

As for sponsors, once Google allowed AdWords advertisers to track conversions (if they weren't doing so already) most heavy sponsors probably realized that the conversion rates and traffic being generated from Google's own site placement was superior to the AdSense traffic.

This isn't some soapbox commentary on the influx of scraper and junk sites. It's just the reality of the situation even when the publisher sites are quality. When someone is on Google they are looking for something. The sponsor offers a solution. Way too many times, when someone clicks on a relevant ad on a content site it may have to do with curiousity or enlightenment than a specific purpose to purchase.

That's why Smart Pricing came about and I think many AdWords sponsors are coming to the conclusion that even that isn't good enough so they are unclicking the option to advertise on AdSense. At the very least the sponsors who were bidding far more than a nickel a click have sobered up to that reality.

That's why I think folks who were drawing top dollar per clicks have been hit the hardest, while many others who were serving up less lucrative ads are doing just fine because that dynamic didn't change much.

The second option -- is Google paying less -- is always possible yet I think it's the first part, creating a situation where the sponsors are just paying less and/or avoiding AdSense placement with their pricier bids.

europeforvisitors



 
Msg#: 5446 posted 7:02 pm on Mar 2, 2005 (gmt 0)

As for sponsors, once Google allowed AdWords advertisers to track conversions (if they weren't doing so already) most heavy sponsors probably realized that the conversion rates and traffic being generated from Google's own site placement was superior to the AdSense traffic.

Actually, there have been a number of threads on the AdWords forum where advertisers have reported getting better conversions from the content network than from search. That stands to reason if, for example, an advertiser's ads tend to appear on highly targeted sites that are visited by users who are researching ways to spend their money (e.g., product-review or travel-planning sites). Leads from such ads are likely to be of better quality than leads from SERPs because the prospects have been prequalified (and, in some cases, presold) by what they've read. Whether this scenario is true for any given advertiser or topic is best learned through testing.

Also, because AdSense ads are typically sold at discounts from the nominal bids, the ROI may be better for an AdSense ad even if the conversion rate is lower.

Getting back to the topic of why there's an ongoing decline in EPC and income, I'd have to agree with the post that said the problem isn't universal. I do think "smart pricing" might be one explanation, and it's also possible that Google's compensation formula hhas been adjusted to favor accounts that meet certain criteria in terms of revenues, profitability, type of content and anticipated conversions because of that content, etc. (i.e., a "smart compensation" scheme to go along with the "smart pricing" scheme). There's no way to know, of course.

JuniorOptimizer

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 5446 posted 7:10 pm on Mar 2, 2005 (gmt 0)

I agree about the declining earnings. The sound of $20 CPM going to $5 CPM is something I can definitely relate to.

It really sucks to watch a money-maker go down the drain, but I agree, the "Golden Era" is probably at an end.

OptiRex



 
Msg#: 5446 posted 7:11 pm on Mar 2, 2005 (gmt 0)

Paris

My guess -- and it's stricly a guess here -- is that it's a combination of both.

I'm pretty much in agreement with you here however what disturbs me are the huge fluctuations in ECPM on very specialist niche pages featuring well-targeted ads.

These ads are, realistically, only seen on my specialist sites and the niche pages always have a CTR of between 10-20%.

For the last week I have been experimenting with one of my channels and removed all Adsense except from the index page.

The result so far:

Page impressions - down, obviously
Clicks - more or less the same
CTR - up, obviously, back to 20%
ECPM - up, obviously, $36
Earnings - the same!

More analysis is needed, which I just so happen to be doing right now, however the fact is I am already considering the removal of Adsense from many pages to stop this dilution effect.

More info and data as I proceed.

Anyone else experimenting like this?

universetoday

10+ Year Member



 
Msg#: 5446 posted 7:16 pm on Mar 2, 2005 (gmt 0)

I've been closing in on two years now, and I've found my EPC have stayed roughly similar for the entire time - they started at the bottom of the barrel, and stayed there. My traffic has increased signficantly, so my earnings have gone up nicely.

My theory, and I'm sure it's just speculation, is that the it's the folks with the high paying keywords seeing the bottom drop out of their earnings because competitors are diving in to try and share some of that money. With more advertising venues available, advertisers will naturally be able to pay less for clicks. Notice all the people asking what the high-paying keywords are? There's your answer.

So, if you were getting high EPC before, I'm sorry. Eventually, you will be earning the same amount per click as me. It's inevitable.

Jon_King

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 5446 posted 8:28 pm on Mar 2, 2005 (gmt 0)

>>It's inevitable.

Flat rate. Scary, isn't it.

OptiRex



 
Msg#: 5446 posted 9:43 pm on Mar 2, 2005 (gmt 0)

So, if you were getting high EPC before, I'm sorry. Eventually, you will be earning the same amount per click as me. It's inevitable.

Only if this were to occur and only if I were to stay with Adsense and only if I were to accept it as inevitable, which I do not since I shall do something about it.

The first thing I am doing is to restrict the advertisers having complete access to my sites. I have already removed Adsense from some 1,000+ low performing, less viewed pages and am evaluating which others to cull.

I won't perform the cull immediately preferring to wait and see exactly what happens. I am probably fortunate, I do not rely on Adsense for any of my income therefore I am in the position to experiment.

I am also fortunate in that I have regular banner advertisers waiting for the Adsense spaces I use and they are prepared to pay a realistic value for those positions.

I really do not want to go down that route since I do feel that Adsense provides speciality sites with a much more ideal advertising program than trade widget advertising since it gives anyone the chance to advertise on my sites at very reasonable cost and rotated on Adsense throughout all the pages.

It would be a great shame to have to remove Adsense completely, however when push comes to shove and the necessity is evident it will be done since Google would not hesitate to cut me out if they were to be offered a more lucrative deal.

This is the reality of the new corporate Google. It's accountable to shareholders now and they will not hesitate to take my efforts and reduce my earnings by as much as they can possibly get away with until a substantial quantity of sites shout "enough" and they have to restore the earning levels!

To those who have seen the same as myself, check pre-flotation and current earnings:-(

Undead Hunter

10+ Year Member



 
Msg#: 5446 posted 9:46 pm on Mar 2, 2005 (gmt 0)

It's inevitable that things will flatten out.

A great example is my friend - whom I've been helping with his online store. He was throwing $1,000 a month at Adwords, doing NO conversion stats and just looking at what traffic was coming in. Set his bids high enough to show, and walked away from it.

I installed the conversion tracker for him - he had no idea how to do it or what it did, and he's a fairly technical guy - and we learned he was tossing money out the window. We dropped nearly all his bids to minimum levels, and continued to bring in 3/4 of the sales (after we gave it a little time to see what was happening in terms of conversion rates) at less than 1/2 of what he was paying.

The fact is he has small margins on his products, and can't afford very much for ads and still be profitable. You're going to see more and more businesses come around to this - AdWords isn't good for selling certain things. Other things it is, but only at a certain rate.

And let's not forget about the content traffic: for him, the conversion rate on that was horrible. So we cut it out completely.

Two trends that don't bode well.

And our experience - we have a general site, very large. I just checked, and while our CTR is the same since we started, our CPM has dropped by 1/3 since the average month last year.

But for me, that just means I'm going to assume only 1/2 the current CPM, and continue to grow our sites based on that. In a year when we have more page views, there are things we can use to monetize our sites, other networks, and even rumors of Microsoft and Yahoo working on PPC networks...

OptiRex



 
Msg#: 5446 posted 10:19 pm on Mar 2, 2005 (gmt 0)

Interesting post and information Undead Hunter, many thanks for that.

I suppose the reality is that because Adwords is so easy for everyone to do it is also very easy to let it ride without evaluating the results and until anyone does what you have they will keep on going since they perceive that it is working for them.

It's the old Henry Ford maxim, "I know only half of my advertising works, the problem is that I'm not sure which half it is!"

I've just doing some more analysis which, so far, has thrown up some very interesting facts...thanks for Channels Google, without them I wouldn't have known this.

I hope I don't have to eat my own words. One of my sites seems to have cornered the 5 cent click market!

Undead Hunter

10+ Year Member



 
Msg#: 5446 posted 11:44 pm on Mar 2, 2005 (gmt 0)

Hey Opti:

I'm not surprised about the $0.05 market... when helping my friend, I searched around for a lot of different phrases relating to commerce, different products. Frankly, unless you're the direct seller, in the majority of markets I looked at, it just doesn't make sense to pay more than $0.05 a click.

In fact, it got me thinking that long-term, when all this PPC stuff stabilizes, that affiliate programs will be the better way to go.

It's definitely influencing the kind of sites we'll be building over the next few years.

europeforvisitors



 
Msg#: 5446 posted 12:20 am on Mar 3, 2005 (gmt 0)

The fact is he has small margins on his products, and can't afford very much for ads and still be profitable. You're going to see more and more businesses come around to this - AdWords isn't good for selling certain things.

That's probably true, and maybe it's why we're seeing a drop in EPC and CPM in certain sectors.

Other things it is, but only at a certain rate.

That's true, although you could say the same thing about any form of advertising.

I think where AdSense will really come into its own is as a source of leads. I'm already seeing a lot of this in the travel sector. A travel agency that gets a commission of 10% to 20% on a cruise or tour package can afford to spend more per click than a hotel affiliate that's getting 5% of a night's stay at the Shelbyville Holiday Inn. And, of course, AdSense makes it possible for vendors that sell direct to bypass agents and affiliates. Some of the large hotel chains, for example, are making a concerted effort to reach the consumer directly, and AdWords/AdSense is a way to do that.

And let's not forget about the content traffic: for him, the conversion rate on that was horrible. So we cut it out completely.

Some advertisers on the AdWords forum have reported excellent conversions from the "content network," so--as with most things--what works or doesn't work in one business may work differently in another.

On my own travel-planning site, I know from experience that affiliate links generate substantial revenue, and that hotels, cruise lines, guide services, etc. which I've featured in articles are profiting from the traffic that I send their way. So it isn't too unreasonable to assume that AdSense ads also result in transactions or qualified leads.

Somebody else made a comment about an earnings decline on his "general site." Although I can't prove it, I believe that special-interest sites tend to do better with AdSense than general-interest sites do. In the offline world, advertisers often use general-interest media for branding and enthusiast or trade publications for ads that are intended to get inquiries or generate immediate sales. If I were an advertiser selling widgets with PPC ads, I'd be more comfortable having my ads on widgetworld.com than on a blog or on cnn.com.

Undead Hunter

10+ Year Member



 
Msg#: 5446 posted 1:04 am on Mar 3, 2005 (gmt 0)

Hey EFV:

Absolute agreement - you have a brilliant site from an advertising perspective. And travel IS a great sector that way. Plus travel has about the highest priced packages you can get online. Your kind of site, the kind that helps people make buying decisions (essentially) will always be strong, always have a good base to monetize from.

About the niche vs. general sites... I have a niche site that was doing gangbusters for about four months, then the bottom seemed to drop out of the market. The danger of a niche site is that if its not working for the clients, they dry up and go away. Whereas the CPM drop in my general site has been such a slow leak I didn't really notice it as we grew in traffic. But no question the niche sites were paying much higher.

It also occured to me that we may have lost some of our CPM *because* we have more articles than we did last year at this time... specifically, more articles in lesser paying categories which brings the overall CPM down.

And yes, we are seeing more and more businesses move from magazine advertising onto the web, and testing out AdWords. Trade pub's are already sounding the alarm about this...

athens

5+ Year Member



 
Msg#: 5446 posted 1:44 am on Mar 3, 2005 (gmt 0)


I agree about the declining earnings. The sound of $20 CPM going to $5 CPM is something I can definitely relate to.

It really sucks to watch a money-maker go down the drain, but I agree, the "Golden Era" is probably at an end.

Oh well... I was just about to give Adsense a whirl and was set to pre-order a book on it:

Make Easy Money with Google : Using the AdSense Advertising Program
by Eric Giguere

Guess it's back to plan B, build websites for money...

europeforvisitors



 
Msg#: 5446 posted 2:19 am on Mar 3, 2005 (gmt 0)

And travel IS a great sector that way.

Yes, and the supply of new advertisers is nearly unlimited if only because there are so many destinations, hotels, resorts, travel agencies, etc. out there. I can see how things much be tougher in a niche that's dominated by a limited number of advertisers.

clearvision

10+ Year Member



 
Msg#: 5446 posted 3:50 am on Mar 3, 2005 (gmt 0)

I have to agree with this subject...with much regret.(To be honest I came on here to look for just this topic and wondered if it were just me:)

Traffic is steadily increasing and epc is steadily declining. I know for a fact that the adwords click cost for advertisements appearing on our major most site have NOT decreased, while our earnings for them have. If our current traffic earned the amounts last summer we would be in the UPS club... big time!

Our affiliate programs convert very well, so as EFV stated it would stand to reason that the conversions are taking place when visitors click ads. It just makes me wonder if we should rethink our strategy?

This is not a gripe by the way, any good business should always be evaluating and adjusting as needed.
Just a hmmmmmm moment :)

IanCP

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 5446 posted 10:02 am on Mar 3, 2005 (gmt 0)

I've religously followed this topic over at least two threads.

Like myself, many have found a large drop in EPC in the last month.

HOWEVER:

I believe they're 1,000's of Adsense publishers here on WW.

How many have complained?

Look through the threads, some have even said they have had improved figures last month.

Perhaps we should accept that we [IMHO} are in a small minority and should simply shut-up.

IMHO - yes it hurts....

newkid2005

5+ Year Member



 
Msg#: 5446 posted 11:08 am on Mar 3, 2005 (gmt 0)

I would not be surprised if there is a lot of silent suffering...

I am watching steady decline of my Adsense EPC since October (down 50% now).

And this is my first and last post on this topic.

jhood

10+ Year Member



 
Msg#: 5446 posted 11:12 am on Mar 3, 2005 (gmt 0)

"Perhaps we should accept that we [IMHO} are in a small minority and should simply shut-up."

The purpose of a forum like this is, at least partly, to give aid and comfort ... and look for answers. I don't think shutting up is called for.

My site (consumer news, reviews, etc.) delivers more than 3,000,000 impressions/month on a wide range of topics (automotive, finance, travel, health, etc.) and did very nicely until the afternoon of Feb. 5 when the bottom fell out. The ads simply disappeared. Having nothing to click on, readers' fingers grew fat and lazy. CTR and EPC both dropped. Our revenue fell 90% and has never recovered.

I think all the reasons cited are valid but the sudden drop at a particular time leads me to think there is also a technical glitch that is affecting some sites. A certain Web search company with whom I've corresponded has not denied this.

We have since put other advertising in the space normally occupied by AdSense and are trying out some new things, some of which actually look pretty promising.

We still have AdSense on a few smaller sites and have kept it on a few scattered pages of our primary site, just to keep a toe in the water.

Google, if you ask me, was reckless in admitting so many scraper and other marginal sites to its program and it has devalued content advertising by doing so. But -- big but here -- some sites are still working properly, as EFV and others remind us and as we can see with our own eyes. Something is amiss with those that aren't and it's too bad no one seems to be able to fix it.

Postscript: curses to the current rulers of the White House and Congress whose legislation restricting class actions has done nothing to help the legal keyword search business. Hey, I thought the GOP was a friend of small business? (sarcasm intentional)

great_9

5+ Year Member



 
Msg#: 5446 posted 12:15 pm on Mar 3, 2005 (gmt 0)

They are definetly giving us less.
Stats and earnings are faked/changed that only a crook would do it.
My earnings for February are "number zero zero comma zero zero" now.
I wasn't affected when the rest of you were :)
Now, the CPM is lower for about 55%.
Good thing I have the CSV's before they "applied" the change.

kenc1959

5+ Year Member



 
Msg#: 5446 posted 12:50 pm on Mar 3, 2005 (gmt 0)

I have been following here for about 6 months now and finally feel compelled to post. I have a local directory that I have maintained for 5 years of which I am in the middle of major updating and I have also seen a 35-40% drop between January's and February's earnings although I have seen a slight increase in visitors and page views. Adsense is on every page, some with rotating colors, some just matching my colors. However, I am seeing that google search is now doing much better than adsense within the site.

OptiRex



 
Msg#: 5446 posted 12:55 pm on Mar 3, 2005 (gmt 0)

I am seeing that google search is now doing much better than adsense within the site.

I've dumped this as of last night since the figures and usage just do not add up to me.

Why should I get such a small amount for the same ads which are being displayed on my sites?

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