| This 73 message thread spans 3 pages: < < 73 ( 1  3 ) > > || |
|Google just disclosed the amount of money given to AdSense partners|
substantial increase from the previous quarter
from the press release:
|Traffic Acquisition Costs, the portion of revenues shared with Google's partners, increased to $976 million in the fourth quarter of 2006. This compares to TAC of $825 million in the third quarter. |
|but the number of adsense publishers doubled, which is why most publishers earned less. |
Sounds like supply and demand, and that you and EFV may be more in agreement than either of you may realize, lol.
Also, if supply gets doubled, that's not a slashing of percentage paid by Google, is it? Isn't that supply and demand? Not something Google slashed, but what the market forces created? Just speculating and I could be wrong, but it sounds reasonable enough.
I recall bidding on the content network in Spain. The search side was sleepy enough in the States, and positively comatose in Spain for this phrase. However the content network was hitting some media outlets and delivering hundreds of thousands, almost a million imps per month and way too many clicks that weren't converting. I had to cut the CPC to the bone and it was still too expensive. Supply and demand. I could be wrong, but at the time it felt like too much supply and not enough demand.
|Also, if supply gets doubled, that's not a slashing of percentage paid by Google, is it? |
In a roundabout way, it is. Because some of those new boys have contracts that guarantee minimum dollar payments from Google irrespective of how much ads on their site actually generate.
|they have the ability and they have the motive... to argue otherwise does come across as sycophantic. |
|>>>I'm not one of the forum members who keeps stating (against all evidence) that Google has slashed its payout percentage<<< |
when a bunch of forum members with yearly records of consistent earnings say that their epc has been slashed, it certainly is evidence that google is doing something.
it's arrogant to claim that their sites are "less valuable" to google... you don't know enough about their sites, or about google, to determine why their earnings got slashed.
for all you know, efv, google could have suddenly started doing it to random publishers on a cyclical basis, simply to pad the profit margin.
[edited by: martinibuster at 10:02 am (utc) on Feb. 2, 2007]
[edit reason] TOS 4 & 19. Thanks. [/edit]
|In a roundabout way, it is... |
Bravo! Great point. :)
But I have to confess to being absolutely clueless to the extent of money involved (I don't analyze those 10k forms).
In your opinion, are there enough of these arrangements to cut into the revenue more than the effect of doubling of publisher inventory? What kind of dollar amounts do you estimate we're talking about?
Don't forget that many earlier "new boy" deals will have expired by now. There will always be "new boy" deals for new boys, but new boys eventually become old boys who need to earn their keep.
Then, too, we keep coming back to the question of why only some members are reporting big reductions in income while others are reporting increases. If a sweetheart deal with bignamesite.com is sucking money out of the publisher pool, why is John Doe's payout percentage being cut while Jane Buck's payout percentage is being raised?
I'd be the first to concede--indeed, I've often suggested--that Google isn't likely to have a simple, flat-rate percentage cut, and there may any number of factors that determine what share a publisher earns. But it's naive to think that Google is going to choose certain publishers at random and cut their payout rates by 50% while leaving other publishers alone. If I had to guess, I'd say that:
1) Market forces are responsible for some--and probably most--earnings changes (see KenB's excellent post below); and...
2) Google may be using profiling to encourage publisher behavior or content that it likes while providing smaller rewards for publisher behavior or content that it considers to be less desirable. (Mind you, this is speculation, though it makes more sense than "My site was picked at random to have its payout cut by 50%." And it wouldn't be unreasonable, given Google's use of "signals of quality" in search and "quality scores" in AdWords.)
In any case, it's just plain silly to argue that Google has slashed the amount of money paid to its AdSense partners when Google's published numbers make that allegation so easy to disprove.
[edited by: europeforvisitors at 3:34 pm (utc) on Feb. 2, 2007]
|You've forgotten that other publishers have reported the opposite experience. So, if the victims think "Google is doing something" to them, they should be asking themselves "Why me?" instead of wasting their time on conspiracy theories. |
On the first part of this statement I can say that I am among those publishers who can report a continual increase in eCPM (based on page views and impressions) and a generally stable CPC for the past two years.
I attribute my improving eCPM with stable CPC to Google attracting better advertisers that are more relevant to the interests of my users thus increasing my CTR.
The real questions that should be asked of people who constantly report declines Are:
How closely do they really track their data?
Do they graph out their earnings and traffic data on a daily basis (e.g. Excel spreadsheet) or do they go on gut impressions with no hard data?
Do they looking at three month trends, six month trends or yearly trends?
Like others I don't see this as some Google conspiracy as much as a lack of careful data analysis and simple fluctuations due to the laws of supply and demand. As some niches become saturated with publishers, the supply of ad slots will drive down bid prices. This is particularly true with niches and key terms that attract the "gold digging" stampeders who chase the highest paying terms de jour. Seasonal fluctuations in overall Internet traffic levels also play a huge factor in eCPM. For instance in the summer months (northern hemisphere) when schools are out and people are on vacation, I see an almost doubling of my eCPM in comparison to the winter months.
People might want to dismiss it, but supply and demand really is the primary factor behind much of the eCPM fluctuations we see in AdSense. I have over three years of daily data to back this up and I can with a great degree of certainty predict my general eCPM and total earnings for any time of the year.
The entire argument that Google is trying to encourage certain behaviours and punishing sites that are not following the rules holds no ground with us.
Our site and indeed our network was asked to be a case study a few months ago.
Would you consider that to be a sign from Google that our sites are not of the highest quality?
Would Google want to showcase sites they are not in approval of or even proud of the fact they are showing adsense ads?
Our profits have been cut about 35-40% now as of mid December, no change in traffic, no change in advertisers and from what we can see, only a increase in advert price to people advertising on our sites.
If our traffic is the same
If our inventory is the same
If our ad placement is the same
If our rep says we are NOT getting smartpriced
If our ads cost more then 6 months ago to advertisers
Then there can only be one logical conclusion.
I doubt this is happening to all accounts or even most accounts, just certain handpicked juicy accounts that can get squeezed. Squeeze 1 account such as ours or squeeze 250,000 little accounts to yield the same effect.
Drall, you're mischaracterizing what I said. (I'm not "arguing" that Google is using some kind of quality score; I used the word "speculation" and the phrases "may be using" and "If I had to guess." If you re-read what I said, you'll see that I was talking about possible reasons why some publishers have done worse than others beyond the more obvious reason of variations in supply and demand.)
As for your network, I have no opinion about its quality, because your Webmaster World user profile doesn't include a URL.
I doubt very much that Google is "putting the squeeze" on your account; other possibilities could easily include:
- A sliding scale that works in reverse, with diminishing returns as traffic and clicks increase beyond a certain point. (Think of this as "spreading the wealth," or the opposite of the more customary "help the rich get richer" philosophy. If such a reverse sliding scale were in place, it would help Google by retaining the loyalty and interest of smaller publishers who otherwise might decide that AdSense, like Amazon.com, isn't worth the bother.)
- Something that I mentioned earlier (under the heading of "speculation"): an attempt to reward certain types of content. This wouldn't be necessarily be about quality per se.
- A change in how ads are allocated, so that a high-traffic network like yours wouldn't get as many higher-paying ads for any given keyphrase as it once did. This would be similar to, but separate from, a reduction in higher-paying ads caused by the "dilution effect" of a growing publisher pool.
In any case, regardless of the fact that some publishers are doing worse than they were before, it's obvious that Google hasn't slashed its payout percentage across the board, as some members have alleged. If that were true, we'd see evidence in Google's official numbers.
>>>Also, if supply gets doubled, that's not a slashing of percentage paid by Google, is it?<<<
not when an increasingly larger percentage of that google tac is going to partners(not publishers like us), who are getting to keep 100% of their income... i have provided proof of that multiple times out here before; also go back and read what shorebreak posted.
why do some partners get to keep 100% of their adsense income? because they are more valuable to google than we are... look at the pecking order:
1)google properties: every quarter they have the largest percentage gain of income growth.
2)google partners: growth unknown, but they keep up to 100% of the income, what more needs to be said?
3)google publishers: the dregs of adsense, with the smaller percentage of income growth every quarter.
media pundits documented those trends over a year ago.
>>>Do they looking at three month trends, six month trends or yearly trends?<<<
nobody out here preaches channel and epc stats more than i do, but i'll tell you that the program has changed so much in the last year that the value of that for predictive purposes isn't the same for everyone.
it can be a lot more difficult for large publishers to understand the effects that those changes have had on certain sectors.
>>>Google may be using profiling to encourage publisher behavior or content that it likes while providing smaller rewards for publisher behavior or content that it considers to be less desirable.<<<
deja vu... efv, if that's true, doesn't your epc history make it applicable to you? so how come you can't tell us what google wants you to change? we just went through this.
re-posting the same false premises over and over again does not advance the discussion.
EFV, you seem to be passing off a lot of speculation and opinion as fact.
|If that were true, we'd see evidence in Google's official numbers |
Not necessarily. Goog could have slashed its payout percentage but if it agreed some bonuses to a few premium publishers the overall percentages would look the same as previous quarters. No evidence.
|Don't forget that many earlier "new boy" deals will have expired by now. |
You know this for a fact? Enlighten us.
|There will always be "new boy" deals for new boys, but new boys eventually become old boys who need to earn their keep. |
Do they? Do you have a date by when myspace, digg etc., are going to "earn their keep"?
And, if you're rubbishing how much of money all these deals are sucking out of the TAC why don't you give us the real figures? A few hundred million here, a few hundred million there and you're soon talking serious money. Serious money that was previously going to small publishers. But the overall percentages still remain the same.
|it's just plain silly to argue that Google has slashed the amount of money paid to its AdSense partners when Google's published numbers make that allegation so easy to disprove. |
Google has Adsense partners and Adsense Premier Partners. Google's published numbers don't make anything easy to disprove because they don't give you the breakdown between what you call the Sweetheart deals, the Premium Partners' deals and what the small publishers get. So, quit making out that Google's numbers prove it hasn't slashed payment to one group of publishers ...because that's complete nonsense.
I could go on. It doesn't help the discussion when people try to skew it with untruths.
|deja vu... efv, if that's true, doesn't your epc history make it applicable to you? so how come you can't tell us what google wants you to change? we just went through this. |
1) This thread isn't about me or you, so please stop cluttering it up with misquotations and comments abbut my site.
2) You keep forgetting my comments about supply and demand (including seasonal supply and demand).
3) Obfuscation won't change the fact that Google paid out to AdSense partners in 4Q 4006 than during any other quarter in the company's history--and the overall percentage payout is virtually unchanged from the previous quarter. (And yes, we're "AdSense partners," whether you choose to acknowledge that or not. That doesn't mean we all get the exact same precentage, of course; no rational member of this forum has ever suggested that we do or should.)
[edited by: europeforvisitors at 5:22 pm (utc) on Feb. 2, 2007]
|overall percentage payout |
There we go again! :)
|So, quit making out that Google's numbers prove it hasn't slashed payment to one group of publishers ...because that's complete nonsense. |
I've never said that Google hasn't slashed payment to some publishers; I have suggested possible reasons (beyond market forces) why or how Google could have reduced payouts to some publishers, and I've suggested that publishers who feel they've had their payouts cut should ask "Why me?" instead of making sweeping and unsupportable claims about an overall cut in payout.
|It doesn't help the discussion when people try to skew it with untruths. |
I agree completely, and that's why I'll repeat what I said earlier in this thread:
|At the risk of bringing this thread back on topic, let's acknowledge what we've learned from Google's conference call and press release of January 31: |
- Google paid $916 million to its AdSense partners in the fourth quarter of 2006. (That isn't counting the $60 million paid to "distribution partners.")
- "Google's partner sites generated revenues, through AdSense programs, of $1.20 billion" in the same quarter.
- Divide $916 million by $1.20 billion, and you get 76.3333%.
That's what we know. Everything else is idle speculation or venting.
[edited by: europeforvisitors at 5:37 pm (utc) on Feb. 2, 2007]
|Everything else is idle speculation or venting. |
I couldn't agree more.
Especially all that stuff about overall payout percentages to ordinary publishers remaining unchanged: complete speculation.
|Especially all that stuff about overall payout percentages to ordinary publishers remaining unchanged |
What stuff? And which "ordinary publishers," since some members of this forum are seeing declines while others are seeing increases?
Again, the numbers are there in black and white. Some publishers may be winners, and some may be losers, but that's the nature of the business.
Thing is, questions about what Google is doing, and how much and to whom, all don't matter in the end.
The only site you have to worry about getting a proper ROI is your own. If your arrangement with G pays enough at the end of it all to be worth keeping up your relationship with them, then keep it. If you can get a better deal elsewhere, go for it.
Whether someone else is getting a preferred deal, or a cut or being underpaid is between them and Google. As soon as G stops making it worth my while to carry their ads, I'm off. If enough people do so, well, Google are good at spotting trends.
That said, I and a lot of other webmasters seem happy with the cut they get from the deal (whatever that may be!).
|nobody out here preaches channel and epc stats more than i do, but i'll tell you that the program has changed so much in the last year that the value of that for predictive purposes isn't the same for everyone. |
In my case the interesting thing about many of these changes Google does is that in the short run they hurt (e.g. smart pricing), but then I quickly bounce back stronger than before. For a week or two I might see a drop, but pretty quickly new advertisers start coming into my niche and my CTR starts to climb as does my eCPM.
|it can be a lot more difficult for large publishers to understand the effects that those changes have had on certain sectors. |
I'm by no means a "large" publisher and I'm no where close to being part of the UPS club, but what I do know is that the best course of action with AdSense isn't to chase the latest fad or chase down the latest "gold rush". Instead one should focus on long term objectives and not react to every bump, hiccup, fad or conspiracy theory in regards to AdSense.
|europeforvisitors: Divide $916 million by $1.20 billion, and you get 76.3333%. |
The arithmetic is correct, the logic is wrong. There is NO DOUBT an agreement between Google and 1) AOL, 2) Ask.com, 3) MySpace and 4) possibly more. We do not know the details, but I would put my really old $5 bill on the fact that there are money involved besides percentages, most likely many millions of dollars. So better mathematics would be:
($916 million - X million) / $1.20 billion = Y
which gives us nothing.
No, Alexl, my math is correct. No one is saying that every AdSense partner gets the same percentage, so why get confused (or try to confuse others) by introducing that red herring?
For all we know, Google has a "degree of site suckiness" algorithm that decides who gets what. Or maybe sites with the word "Jesus" or "Buddha" or "envirnomentalism" get 70% of the take while sites with the phrase "little blue pills" or "debt consolidation" get 5%. We don't know. But we do know what Google received in AdSense revenues and paid out to AdSense partners, and anyone with an elementary-school education can do the math.
Who the hell are you arguing with?
Basically, EVERYONE has said what you just claimed. NO ONE has said that everyone gets an equal 76%. In fact just about everyone, EFV included, has said that it makes a lot of sense that there is some sort of sliding scale, even amongst those of us without a special deal.
|No, Alexl, my math is correct. |
Sorry EFV the only way your maths makes sense is if you work on the assumption that everyone is on a percentage agreement. It's known for a fact that this is not true.
|($916 million - X million) / $1.20 billion = Y |
...sounds more like it.
A couple of you guys still don't get it. We're talking about overall payout, not who got advance guarantees, who got a check at the end of the month, or who had to wait for his revenues to reach the payout minimum.
Last quarter, Google paid out just over 76% of AdSense revenues to AdSense partners. It's that simple. Unless you're questioning the validity of Google's earnings report, BigDave is right: You're trying to refute an argument that nobody has made.
I'm not Adsense, but if I were, I would be paying higher percentages to publishers by supply and demand criteria. If I have only a few publishers, and I have alot of advertisers wanting to advertise on that limited space, the cpc would be higher obviously among the bidders, but I would also pay the publishers a higher percentage to guarantee they stick around.
If I keep those publishers happy they are less likely to leave, and I keep cashing in on those advertisers. This also encourages my publishers to create more rich content within the targeted nitch, to ensure I can show as much of inventory as possible each day.
Where I have way too many nitch publishers, and plenty of inventory, I am likely to lower my percentage, to discourage some to the publishers, thereby driving up my cpc in that nitch.
Of course, with my spies working full time watching YPN, any area where Yahoo is taking away my share of market in increasing numbers, would prompt me to increase my percentage of payout to my publishers, so I don't have inventory sitting on my servers, but never shown.
I routinely flip back and forth between YPN and Adsense on certain nitches. The results are amazing, and lead me to believe my "if I was Adsense" theory, may not be too far from reality.
|We're talking about overall payout, not who got advance guarantees, who got a check at the end of the month, or who had to wait for his revenues to reach the payout minimum. |
Ah, so we are talking about different things altogether. Because from where I'm sitting, if Google has made certain guaranteed minimum promises to certain parties (and they have) then those big payments come out of the pool before Google decides payouts to everyone else. In other words whether we small time publishers are getting 76% or 30% depends really on how those special relationships are panning out. That TAC is fairly constant at circa 75% - despite the wide fluctuations in fixed fee commitments - is fair indication that the general publisher base is the buffer. That means that the percentage of the take that you get for ads shown on your site can vary widely depending on all those variables Google talks about and on how much Google is losing on the sweetheart deals.
But, I agree, some here still don't get it.
|Ah, so we are talking about different things altogether. |
Well, that should have been apparent from reading the thread. As I stated in message #4:
|Caveat: The numbers don't reveal what percentage is paid to any individual AdSense publisher. The specifics of who gets what are privileged information that Google isn't likely to share with the public (including its competitors). |
That's the apple course. Now for the oranges:
|the percentage of the take that you get for ads shown on your site can vary widely depending on all those variables Google talks about and on how much Google is losing on the sweetheart deals. |
Google has always had "sweetheart deals," but in any case, what Google may be paying Newyorktimes.com or AOL this quarter doesn't explain why some publishers saw their revenues collapse in 4Q 2006 while others saw improvements. Such publisher-to-publisher variations are far more likely to be the result of supply and demand, smart pricing, and/or changes in the AdSense compensation formula that favor Peter while hurting Paul. But it makes so sense at all to claim there's been an across-the-board payout cut (as some members insist on stating) when some publishers are hemorrhaging, some are bleeding a little, and others are healthier than ever.
If I had to guess, I'd say that all three of the factors that I mentioned above (supply and demand, smart pricing, and changes in the AdSense compensation formula that favor some types of publishers over others) are responsible for the revenue variations that are affecting members of this forum in different ways. Still, as I also said earlier in this thread:
|Divide $916 million by $1.20 billion, and you get 76.3333%. |
That's what we know. Everything else is idle speculation or venting.
|If I had to guess, I'd say that all three of the factors that I mentioned above (supply and demand, smart pricing, and changes in the AdSense compensation formula that favor some types of publishers over others) are responsible for the revenue variations that are affecting members of this forum in different ways. Still, as I also said earlier in this thread... |
All this points to the fact that Google is going to continue to adjust the variables to favor their bottom line...creating the sweetheart deals vs. very deep analysis per sector per volume traffic per new sites/business models that generate huge user bases per established sites with huge user bases......etc...etc...
In all of this...some will gain .. some will lose...no way around this reality..(as painful as it is for some)...
|All this points to the fact that Google is going to continue to adjust the variables to favor their bottom line.. |
Sure, in the same way that EVERYTHING they do is ultimately designed to assure the health and profitability of the business--including things like smart pricing (better value for advertisers), landing-page quality scores on the AdWords side (better AdWords user experience), and attacking search-engine spam (better user experience and audience retention on Google.com).
|Last quarter, Google paid out just over 76% of AdSense revenues to AdSense partners. |
Just reducing the complexity of the topic to this single sentence is misleading. The number is not wrong, no, but catchy thread titles and overly reduced facts leave a somewhat strange taste in my mouth.
The known facts are:
- Yes, Google pay 76% of Adsense revenues to partners
- Yes, there seem to be special deals that affect the individual payout
- No, we do not know details of these special deals
- No, we do not know the number of publishers
- No, we do not know individual absolute payouts other than our own payouts
- No, we do not know individual revenue shares, not even our own
All this uncertainty leads me to thinking that saying "Google paid out just over 76% of AdSense revenues to AdSense partners" could be easily mis-interpreted as "Google paid out just over 76% of AdSense revenues to all AdSense partners". Which is simply not true.
And when presented out of context (i.e. reduced to the single value of 76%), this value is actually pretty useless for anything other than a rough landmark orientation for the industry.
For our daily work the value of 76% has zero relevance. It might help us if an Adsense competitor stepped up and said, "publishers, you get 80% guaranteed". But so far, this is not happening.
|...if Google has made certain guaranteed minimum promises to certain parties (and they have) then those big payments come out of the pool before Google decides payouts to everyone else. |
oddsodd, are you saying that Google does not calculate webmaster payments as a share of the actual click cost, but is redistributing all earnings from a collective pool of all advertisers?
Are you saying that for an advertiser who pays ten cents for a click on my site, a certain amount of that click cost goes to AOL or some other premium partner?
Please correct me if I'm misinterpreting you, but are you saying that Google is collecting all actual charges per click into a "pool" then redistributing it to the haves and tossing what's left to the have-nots?
Is that what you are asserting?
Thanks for clarifying that point.
it seems to be pretty simple
if in the year 2005 there was 1 adsense publisher that got 75% of $1000 s/he got $750. If in the next year there were 2 adsense publishers that got 75% of that $1000 dollars someone or both gets less.
The increase was from $825 million to $976 million = 151 million
That's about 1.1830 more money in the system. If on average everyone got more or less depends simply on the question if Google could aquire 1.1830 the amount of adsense publishers in that quarter. If they got more new publishers than everyone got less if they got less then we all get more on _average_.
If some of above money is diverted to three major publishers, we substract that money and the publishers and recalculate.
As I guess no one knows the variations in the number of normal publishers the whole thing is the usual Google black box
[edited by: mattg3 at 4:40 pm (utc) on Feb. 5, 2007]
| This 73 message thread spans 3 pages: < < 73 ( 1  3 ) > > |