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|Complete rundown of the AdSense changes|
For April 25, 2005
Site targeting is a new way for advertisers to select keywords and sites, and then pick and choose where their ads will appear. From a publisher perspective, if you have a high profile site, or even a quality site within a niche, you could find that advertisers are deciding to target your site specifically. However, those with less-than-quality sites could find themselves with a definite disadvantage.
CPM pricing model
There is a lot of buzz [webmasterworld.com] surrounding the way site-targeting is priced.
With site-targeted advertising, advertisers set a maximum CPM bid - that is, the price they are willing to pay for every thousand impressions – and pay on a per-impression basis. This means that, unlike pay-per-click ads, you'll earn revenue each time a CPM ad is displayed on your site.
This means publishers will earn on a CPM basis for these ads. But the obvious concern, especially with a $2 USD CPM minimum bid is that publishers will earn much lower than what they would without this. Here is what AdSense says (emphasis mine):
For every eligible impression, both pay-per-impression ads and pay-per-click ads compete in the same auction. Our technology will automatically display the highest performing ads on your pages.
It is worth noting that all publishers are opted into this.
Expanded text ads
AdSense is testing ads that fill up an entire ad unit, likely to be similar to the way public service ads appear. They haven't updated the ad formats page with the new ad style (hint hint :) ) but an example should hopefully appear here soon:
These ads will currently only be used with site-targeted ads, which will have the added effect of publishers being able to spot advertisers who are site-targeting their sites.
Google is adding animated image ads, as well as Flash ads [webmasterworld.com]. I wish there was an option to opt-out of Flash ads, while keeping image ads, so hopefully this will be added in the future.
They have also added the wide skyscraper to their ad units that support image ads. That has been added to the ad formats page, and can be seen here: https://www.google.com/adsense/adformats
They have also now added all the image ad styles into their own "category".
That's all folks :)
[edited by: Jenstar at 6:32 pm (utc) on April 25, 2005]
I really don't see what the big deal is... I believe they will put the "best performing" meaning highest bid price per impression ad up.
If your cpm is calculated at $50 CPM via ppc then a bid would probably have to come in at $51.00 CPM in order for the CPM ad to be displayed. Google is a corperation and makes money along side of us publishers. So it will be in their best interest to implement it in a way to make more, not less, money per page.
As far as people worrying about the exodus to the CPM model by advertisers, remember that PPC as beat out the CPM model before. Google itself used to use the CPM model for adwords advertisers on the SERPS. Being both a publisher and an advertiser, I can tell you that for conversions, I will take PPC over CPM any day... For branding, I will take CPM over PPC. I will use both being that I want to both "Brand" and "Convert"....
New Adwords' TOS fails to take into account CPM. It still says:
|Customer shall be charged based on actual clicks on Customer's ads... Charges shall be calculated solely based on records maintained by Google |
See ASA, some of us read things like the TOS ;)
|And they wouldn't have opened adsense up to bloggers |
That's just one indicator of the keen importance with which they hold the publisher network. Too often there are posts saying that Google bends over backwards for advertisers but doesn't give a damn about publishers. That is quite untrue. As you state, they'd lose a lot of money if the publisher network collapsed whereas they can always get more advertisers. That side of the equation is very healthy, and growing at a much faster rate than the expansion of the publisher network. For the complainers: Find another reason for your declining revenues!
|This will decrease revenue for poor quality sites |
We have no reason to believe this. I don't have any scraper sites but at $2 CPM they may be an attractive venue for some advertisers, it's about the ROI and even scrapers will deliver some. See this move for what it really is - not one to separate sites on quality lines - but a move to increase revenue.
With regards concerns about losing income if Google replaces four text ads in a block with a single text ad - and other such concerns - some of you guys seem to forget that Google's income is related to ours. If they reduce the revenue generated by advertisers they lose as well.
Janet Huggard, I don't believe it would be in Google's interest to push < 1,000,000 to CPM. They don't believe they have enough of a fraud problem to warranty weeding out inventory via a high threshold and in fact the bulk of fraud may be happening on the bigger sites - it's less detectable there.
|fearlessrick, if you are having such an issue with Google earning money off of you, there are plenty of other programs to try and see |
We see a lot of the "quit if you don't like it" posts, including from EFV. I'm not sure that's helpful. People have every right to feel aggreived at any perceived slight or a conspiracy they believe is lowering their EPC. The standard reply is usually an explanation of the variables involved. If we supress conspiracy theories we'll one day miss a real one and be all the poorer for it. Saying that, fearlessrick, I don't believe you have a big enough sample to draw any of the conclusions you do. 60 clicks... 300 clicks .... is not really much to base judgements of the program on. Even if you have several thousand clicks a day but all in a single sector - that's skewed.
|.I really do think human beings deserve to be treated better than tiny cogs in a giant wheel of corporatism |
With a large number of publishers, advertisers and other partners what makes you think you are more than a tiny cog? Realise your place in the great scheme of things and you won't be disappointed. Expand and diversify. Develop multiple revenue streams. Mix and Match. And to take that same liberty with metaphors - don't put all your eggs in one basket or you'll be barking up the wrong tree.
There is a lot of negativity in this thread, a lot of assumptions (for example, that you'll only get $2 CPM. That's the minimum which suggests it could be higher. I get over $40 CPM on some channels at present. If advertisers are competing for those pages I think it's unlikely they'll stop bidding at $2.00. Those are valuable pages and they will bid more).
Let's turn this thread around. There are opportunities here from different directions. You could put a note on your site for advertisers. Tell people who wouldn't normally advertise and pay you directly that they can do a CPM deal through Google. Tell existing advertisers why they should bid high for your site. There may even be opportunities for publishers to become advertisers. Buy traffic on sites that are going cheap. If you can pay $2.00 CPM and get a 5% clickthrough rate you're paying $0.04 per visitor. Start a credit card/mesothelioma site and you could make a killing with traffic that cheap. It may even be worth buying space on scrapers @ $2.00. Let's explore what's there to exploit. Let's look at how we can use this to our advantage and earn more money. And discuss covering our butts on issues like impression fraud. But, someone stop the b*tching. :)
"Let's turn this thread around. There are opportunities here from different directions. You could put a note on your site for advertisers. Tell people who wouldn't normally advertise and pay you directly that they can do a CPM deal through Google."
Sounds great. But aren't we prohibited from contacting advertisers? Has that part of the tos changed? My thought was simply at some point to ditch the middleman
---which would not be possible for most sites, but for those of us who actually work in the industry that we write content for and host ads for, this would be an easier proposition.
I doubt Google would object too strongly if you sent them new Adwords advertisers.
well said Oddsod. I for one am looking forwards to this new evolution of Adsense (whenever it may happen). Google are in this to make money - they have a huge vested interest in the content network - which is why they are enhancing it.
I think the G guys are pretty bright - they also have an unbelievable amount of information available at their fingertips, I wish I could get my hands on the info that the content network provides...
|I think the G guys are pretty bright.. |
Forcing publishers to accept 1 large text ad in place of several smaller ones thereby removing choices for my website visitors is not bright at all.
Offering more choices for website visitors to find what they are looking is common sense.
Google has forgotten that it's about the surfers too, not JUST the advertisers.
|Forcing publishers to accept 1 large text ad in place of several smaller ones thereby removing choices for my website visitors is not bright at all. |
Some of us would be perfectly happy if that one ad is better targeted, generates a higher CTR, and earns us double of what those four ads used to earn.
|Forcing publishers to accept 1 large text ad in place of several smaller ones thereby removing choices for my website visitors is not bright at all. |
They already serve up ad units which can hold four or five ads, but display only one. This way, at least, that one will fit the ad space. And if the one has such good performance or such a high CPC rate that it gives you a higher eCPM than a regular text ad block, is the sky truly falling?
|Some of us would be perfectly happy if that one ad is better targeted, generates a higher CTR, and earns us double of what those four ads used to earn. |
Well, it's good to hope.
|I really don't see what the big deal is... I believe they will put the "best performing" meaning highest bid price per impression ad up. |
Exactly. I don't pay for my housing, groceries, and my kids' college expenses with CPM or CPC; I pay with bottom-line earnings.
Even if Google did go to an all-CPM model (which seems highly unlikely), that wouldn't necessarily be a bad thing. Owners of publishing and broadcast media do very well indeed with CPM advertising; why shouldn't we?
EFV, are you kidding? I really think you need to investigate how low CPM prices are out there.
I don't care how low they are. If competitive bidding determines the price and I earn more money via CPM than I do with the current CPC* I'm all for it. Sorry, I can't see your argument.
*According to Google they still try to serve the highest paying ad whether it's from the CPC pool or the CPM one
if I can still earn CPC money and then offload my spare capacity as CPM for a few extra $ then I'll be happy (very simplistic but this is the way I see it working)
But the hugely successful PPC model is what has kept "effective" CPM on AdSense so high.
IMO bringing new CPM advertisers into AdSense will have only a marginal effect, because they won't be willing to bid very high and because of the necessity to opt in sites. And if a large number of current PPC advertisers move over to the CPM model, then I predict you won't be earning more, you will be earning much much less.
I still don't understand it.
|And if a large number of current PPC advertisers move over to the CPM model |
I'm an advertiser. If I move out of PPC I lose a large chunk of traffic that is earning me money. Sure, I go to CPM thinking it's cheaper. Why won't my competitors move to CPM too? And, when they do, why will I still have a cost advantage?
Well, you will understand it when it happens.
The odds of any site earning more in CPM then they could in CPC, is minimal. It isn't going to happen. If you spend a few long days looking through the serps at the Google site, itself, not publishers' sites, you will notice something.
The percentage of MAP (mom and pop) site owners advertising through Adwords, is MUCH higher than the industry icons using it. How much more? I would say only 10% or less are not small businesses, with low end products or services, with limited budgets. To prove that to yourself, take a cruise through Adwords setup, as an advertiser, and look at the bid values in various industries. It is a bit shocking to see how even huge names in the common consumer product and services industries, are only pay cents for the top ads in their nitch. It was an eye opener for me as I browsed hundreds of business categories.
One site on the web, (not mine) scrounged through Adwords and found 20,000 keyword sets to sell to webmasters. Of those less than 150 were of any real value. I know for a fact that those 150 were in about 6 major business sectors. What are the odds that you are in that sector? Slim.
I have done my own research in Adwords, and I can tell you that a tiny fraction of advertisers are paying, across the board, more than $0.50 a click. In my own network, my stats back that up. Sure, I have some words paying a bundle. But, the average click is going for around $0.20 on any given day. That is an average in hundreds of industries.
Now, you think you can get on average, those little bitty Adwords advertisers, now bidding a nickle to fifty cents, to bid much more than $2CPM? The percentage will be low.
Very few MAPs have the ad budgets to pay you much more than $2CPM. The average budget of a MAP for web ads is about $50 a month. (at most, double that in peak season) At $2CPM that means they will only get 25,000 impressions, less than 1,000 per day. At $3CMP, they get about 16,000 impressions, a bit over 500 per day. The CRT is going to be pathetic in most cases. A MAP banner ad usually looks pretty raw. How long will it take them to discover that the CRT is basically nil?
At that rate, unless your current PPC income is purely pathetic now, you will lose a bundle with CPM.
You had better hope the 'big boys' in your nitch are abundant, find you worthy, and bid you up. You are not going to get rich on the MAPs.
More CPM advertisers = more competition for limited space = ultimately higher CPM rates.
This model means they HAVE to periodically serve regular CT ads in the same postion to constantly keep testing the CPM for Click thru ads (since presumably that's what they're comparing: CT-CPM vs imp CPM and not bid vs CPM).
I think we already saw a CPM banner last night on our pages. It was from that original domain registrar whose name starts with an N. It was a leaderboard size and the word "banner" was immediately following the url in the link code. They seem to be on the traditionally lowest CPM ad POSITIONS, on the highest traffic pages with the right size ads. It was totally inappropriate for the position (as in keyword "Net"working vs. fishing "Net"), but I guess we gotta trust G knows what they're doing...
COULD just be coincidence, but our CPM is up 60% so far today for the highest rate in almost 2 months.
[edited by: MikeNoLastName at 6:03 pm (utc) on April 26, 2005]
|IMO bringing new CPM advertisers into AdSense will have only a marginal effect, because they won't be willing to bid very high and because of the necessity to opt in sites. |
As Jenkers points out, minimum- or low-bid CPM ads are likely to show up mainly on pages that otherwise wouldn't have ads--meaning that they represent bonus or incremental income.
On my own site, a $2 CPM ad would have very little chance of appearing on anything but my image-gallery pages, where they'd be welcome because of low clickthrough rates and efective CPM. If an advertiser wanted those CPM ads to appear on my travel-planning pages (where the real money is for me and for advertisers), the advertiser would have to outbid the effective CPM of traditional AdSense ads.
|And if a large number of current PPC advertisers move over to the CPM model, then I predict you won't be earning more, you will be earning much much less. |
I don't see your logic, but in any case, CPM isn't available (at least, not yet) for targeted contextual ads--it's only available for run-of-site ads. So, on a Far Eastern travel site, the Japanese tourist board might be interested in running "Visit Japan" ads on a CPM basis (to encourage readers to visit Japan instead of China, the Philippines, or another country), but a travel agency that's selling overnight hiking packages on Mt. Fuji would continue to use CPC ads so it wouldn't be paying for waste circulation. IMHO, there's a place for both CPM and CPC in the AdSense network, and the two will complement each other on many sites.
"This model means they HAVE to periodically serve regular CT ads in the same postion to constantly keep testing the CPM for Click thru ads (since presumably that's what they're comparing: CT-CPM vs imp CPM and not bid vs CPM)."
I thought the same thing. But what if at some point in certain niches, most of the advertisers have moved out of ppc and into cpm---how do you get a comparison point then?
"If I move out of PPC I lose a large chunk of traffic that is earning me money."
Good point. The lure of lower cost may be balanced to some extent by the risk of losing traffic (unless cpm costs more...or the traffic you're getting is junk)
The core notion of site targeting seems very appealing. It's just the possible application that gives me a nervous tic. And I guess we just don't have enough info yet.
|The core notion of site targeting seems very appealing. It's just the possible application that gives me a nervous tic. And I guess we just don't have enough info yet. |
We'll probably see glitches at first, just as we did (and sometimes still do) with contextual page targeting. I just hope Google makes an honest effort to deliver true site targeting. I don't want ads for home mortgages or South Dakota tourism on my European travel site; if I did, I'd still be using FastClick.
|But what if at some point in certain niches, most of the advertisers have moved out of ppc and into cpm |
What, by investigating the 40,000 websites their ads appear on and adding all those websites to their CPM list?
Surely CPC will still be the preferred method for people who actually want to sell something.
Adsense has done a spectacular job of creating a competitive marketplace with almost no entry-barriers. Supply and demand are the key factors here.
They have unparalelled market intelligence from delivering billions of ad units on the content network - they know how much ad space is unproductive vis-a-vis CPC and now they're going after the traditional CPM market (as an addition to what they already have).
Yup, and here's your chance to bung a third ad unit at the bottom of your pages and avail CPM money if you previously stuck to only two ad units because of PSAs.
The more I think about this the more convinced I become that it'll lead to a massive polarisation in earnings.
A small proportion of high profile sites will benefit massively from a CPM bidding war. A very small proportion. Advertisers don't have time to manage bidding campaigns for hundreds or thousands of individually targetted sites.
That will leave less of the advertisers' budgets to go round the rest of us. With a chunk of advertisers switching to site targetted CPM there will be less competition for PPC slots and EPC will fall. We'll be living off the scraps.
Of course, CPM will bring in new advertisers. Will this be enough to compensate for the shift? Who knows. I fear not.
Google, of course, will definitely make more money from new advertisers. How that money is split amongst us doesn't affect their bottom line.
oddsod: CPM sites have to be specifically opted in to the program. No advertiser is going to pay CPM rates for a site that runs 3 AdSense blocks on a page.
No matter how this pans out ....I'll clean up.
Possibility 1: CPM fills previously unused or underperforming inventory on my sites. I'll make more money. Obviously.
Possibility 2: Advertisers move out of PPC to CPM. I'll lose some Adsense money... but I'll increase my ad spend massively and go into areas I never went before. With no (or substantially less competition) I'll be buying qualified and motivated traffic really, really cheap. I'll sell products to them or push them to affiliate merchants.
I'm sure someone negative enough will propose a Possibility 3 :)
>CPM sites have to be specifically opted in to the program
Not true. Advertisers can also specify with keywords on what type of site they want their ads to appear.
|That will leave less of the advertisers' budgets to go round the rest of us. With a chunk of advertisers switching to site targetted CPM there will be less competition for PPC slots and EPC will fall. We'll be living off the scraps. |
Valeyard, I'd think that site-targeted CPM would increase the total pool of ads and potential clickthrough earnings.
Let's say that you don't get any CPM ads, but buddys-big-site-in-your-category.com does. Buddy's site is no longer displaying as many CPC ads as it was before, which means that your category's CPC ad budgets aren't being exhausted as quickly. Shouldn't that mean more CPC ads served (and more click earnings) for sites like yours that aren't getting CPM ads?
"What, by investigating the 40,000 websites their ads appear on and adding all those websites to their CPM list?"
I'm sure it's the situation in a number of niches that there are only a handful of good sites that a handful of advertisers would like to appear on. I know of several. I wouldn't be surprised if advertisers in some niches already have some idea of the sites they'd like to target.
I'd be surprised if even 10% of advertisers have any idea of sites they'd like to target.
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