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Dollar to euro exchange rates in 2007
depressing trend
RonPK




msg:3537963
 4:39 pm on Dec 31, 2007 (gmt 0)

For those of us who live in the euro zone, and FWIW, I made a list showing the dollar to euro exchange rates Google has used in 2007:

Jan: 0.771 (i.e. 1 dollar = 0.771 euro)
Feb: 0.763
Mar: 0.748
Apr: 0.734
May: 0.740
Jun: 0.744
Jul: 0.723
Aug: 0.736
Sep: 0.708
Oct: 0.703
Nov: 0.675
Dec: 0.695

That is a 10% drop over the year. Quite depressing, but at least this month it was up against the previous month. Let's hope things get better in 2008!

 

onlineleben




msg:3537974
 4:52 pm on Dec 31, 2007 (gmt 0)

Would be interesting to check against what was the official exchange rate for the day of transactions.

bateman_ap




msg:3537975
 4:54 pm on Dec 31, 2007 (gmt 0)

On the other side of the coin, some of us who live in Europe and pay some of our developers in $ are quite happy!

RonPK




msg:3537985
 5:09 pm on Dec 31, 2007 (gmt 0)

Hehe, good for you, bateman!

A good thing about the cheap dollar is that energy prices haven't risen that much, as the price for oil is set in US dollars.

Also, some American products, such as cars, have become cheaper over here. On the other hand, other products have not: the prices of Apple's computers, iPods and iTunes songs seem to be fixed in concrete...

Reno_Chris




msg:3538034
 6:20 pm on Dec 31, 2007 (gmt 0)

Good luck on this one....

As the economy in the US deteriorates, the federal reserve central bank of the US will likely continue to cut interest rates. This has a strong negative effect on the relative value of the US dollar. The outlook for the US dollar is a continued general downtrend for the next year or two.

iwannano1




msg:3538060
 7:01 pm on Dec 31, 2007 (gmt 0)

USD to other currency rate will keep going down in coming years. There is nothing you can do. Google is also moving some major business to ireland to get tax benfit and to avoid sudden economical changes.

nomis5




msg:3538093
 7:48 pm on Dec 31, 2007 (gmt 0)

My prediction for 2008 is that the US$ will continue to slide against most currnecies but the GBP will plummet even more. I'm not going to bet on it, that's a mug's game. But UK interest rates are set to fall (ex-Northern Rock), job prospects will become depressing and Gordon Brown is no Prime Minister. He's leading us right off the edge of the White Cliffs of Dover. Sounds good to me if the USD / GBP exhange rate makes the GBP worth less!

europeforvisitors




msg:3538118
 8:22 pm on Dec 31, 2007 (gmt 0)

Why not diversify? Try to earn part of your income in U.S. dollars--e.g., from AdSense--and the rest in euros, GBP, or another currency that's strong (at least for the time being). If your site has a global audience, you shouldn't need to tie your fortunes to a single currency.

onlineleben




msg:3538351
 2:16 pm on Jan 1, 2008 (gmt 0)

<off topic>
some American products, such as cars, have become cheaper over here.
But who wants to drive one of those in europe?
Gas guzzling as they are ... </off topic>

europeforvisitors




msg:3538405
 5:15 pm on Jan 1, 2008 (gmt 0)

Questions for discussion:

How does the decline of the USD (in comparison to, say, the GPB or the euro) affect AdSense bids and earnings? If a dollar is cheaper, doesn't that give advertisers in strong-currency countries more leeway in bidding? In other words, can't bidders in London or Frankfurt afford to bid more (in U.S. dollars or cents) than they did when the dollar was strong?

FWIW, I've got a travel site that reaches a substantial British and Continental European audience, and EPC has climbing as the dollar has been dropping. Is it possible that the scenario I've just outlined (cheaper dollars = higher dollar bids by GBP and EUR bidders) is working to the advantage of sites that get a lot of advertisers from strong-currency countries?

koan




msg:3538531
 12:07 am on Jan 2, 2008 (gmt 0)

EFV, if the US dollar gets cheaper, I think you should see an increase of european tourists going to the US (and higher bids), and a decrease of US tourists going to europe (lower bids).

In the 80s-90s, there were a lot of japaneses and germans traveling the world because of their high currencies.

RonPK




msg:3538692
 9:51 am on Jan 2, 2008 (gmt 0)

EFV, you may be right about the effect on bids and earnings. But on the other hand, in quite a number of cases geotargeting will make euro advertisers compete with other euro advertisers, and US advertisers with US advertisers. So no exchange rate advantages there.

onlineleben, I had a brief look at the rates at the transaction days. The Google rates on average were about 0.002 eurocent higher than the base rates I found somewhere on the web. Maybe Google is a smart currency trader, or maybe it helps that many European advertisers pay in euros.

martinibuster




msg:3538707
 10:14 am on Jan 2, 2008 (gmt 0)

>>>I think you should see an increase of european tourists going to the US (and higher bids),

Aren't European consumers, Germans in particular, reluctant to purchase things online?

HarryM




msg:3538731
 11:46 am on Jan 2, 2008 (gmt 0)

IMHO what we are seeing is an adjustment of currencies to the new order where currency blocks with large internal markets are more important than national currencies. The dollar, which used to have the largest internal market, has lost its supremacy with the rise of the new currency blocks: the Euro Zone, and the Chinese RMB.

The dollar will eventually stabalize at some point, but in the long term the small nation currencies such as the Yen and the GBP will be the ones most at risk. Personally I think we Brits were extremely shortsighted not to have joined the Euro long ago. :(

HuskyPup




msg:3538782
 1:37 pm on Jan 2, 2008 (gmt 0)

Aren't European consumers, Germans in particular, reluctant to purchase things online?

From where did you get that information?

The UK online purchasing is the largest by value in Europe and went crazy this year, Amazon alone was despatching some 350,000 items every day and all the reports I have read have suggested it way surpassed expectations.

According to Forrester research:

"The largest online retail market is the UK, with 27 million online shoppers spending more than 700 each online during the Christmas shopping season accounting for a record-breaking 20 billion in online sales. Germany's online shopping spend has grown to 12 billion."

[forrester.com...]

Bear in mind this was forecast in October and was definitely bettered.

</sorry if a bit off-topic>

europeforvisitors




msg:3538860
 3:43 pm on Jan 2, 2008 (gmt 0)

Aren't European consumers, Germans in particular, reluctant to purchase things online?

Depends on the country and the product or service. The European Travel Commission's New Media Review has tons of research data on Internet usage, e-commerce penetration, etc. in countries and regions around the world:

[etcnewmedia.com...]

According to Travelmole (which is cited on Etcnewmedia.com), Internet penetration and credit card use in Europe lags behind that of the US by about five years, but the gap could close over time.

zett




msg:3538879
 4:16 pm on Jan 2, 2008 (gmt 0)

Would be interesting to check against what was the official exchange rate for the day of transactions.

I have been tracking this for a long period now, and -to my utter surprise- I found that Google typically uses a better exchange rate than the 'official' rate. For us, the final amount is within the range -1.7% to +2.3%, i.e. tolerable.

Unfortunately, I can not see a distinct pattern; sometimes its less, sometimes is more. No big deal.

HuskyPup




msg:3538880
 4:20 pm on Jan 2, 2008 (gmt 0)

Internet penetration and credit card use in Europe lags behind that of the US by about five years, but the gap could close over time.

Hmmm, I find that very difficult to believe in northern Europe especially, it is used less for leisure in the Mediterranean countries simply because they do not find the "need to use it" during their leisure time and, being honest, when I am in Italy I avoid it like the plague.

It would be interesting to know if "order on-line, collect and pay in-store" are included in sales figures since this is a definite growing trend in the UK amongst several national multiple retailers.

The fact is that in every country I visit the way the Internet is used differs greatly to the way our businesses use it. To try and predict a US/UK type of adoption and usage would be misleading.

[/gone completely off-topic now!]

My average EPC has, more or less, increased in-line with the Dollar devaluation however the much lower CTR has ruined that little bonus.

Taking December 2007 as my new average I would need to be earning 400% more now to be in the same situation of my best months of 2006.

europeforvisitors




msg:3538888
 4:38 pm on Jan 2, 2008 (gmt 0)

My average EPC has, more or less, increased in-line with the Dollar devaluation however the much lower CTR has ruined that little bonus.

I had a decline in CTR during much of December, but clickthroughs began increasing right after Christmas, as did affiliate bookings. FWIW, I just compared my CTR figures for December 2007, 2006, 2005, and 2004, and the same pattern has occurred every year: A significant dropoff in early December, followed by a recovery on or immediately after Christmas.

rj87uk




msg:3538898
 5:06 pm on Jan 2, 2008 (gmt 0)

Does anyone have a chart for the doller to the pound() like Ron has done?

I hate the feeling of making more money and getting the same once its been changed from dollers into pounds.

RJ

BigDave




msg:3538961
 6:09 pm on Jan 2, 2008 (gmt 0)

But on the other hand, in quite a number of cases geotargeting will make euro advertisers compete with other euro advertisers, and US advertisers with US advertisers. So no exchange rate advantages there.

But wouldn't that give you, as a publisher, an advantage if your site is meant to appeal to Europeans instead of Americans?

If German publishers are competing against each other and bid up the geotargeted CPC, and you get that click, you are earning more dollars than I would get from similar clicks geotargeted at Americans. So it might come out as a wash for you in the end, higher EPC in dollars adjusted down by the exchange rate.

I have no idea if this is actually happening, but it would be interesting if some sites that are aimed at non-american markets would look at their EPC over the same time period and compared them to the exchange rate.

HarryM




msg:3539375
 11:38 am on Jan 3, 2008 (gmt 0)

Does anyone have a chart for the doller to the pound()

Google for The Financial Times. In their currency section they have a facility to compare dollar/euro/GPB trends where you can set the time period and the base currency.

ronin




msg:3539654
 5:07 pm on Jan 3, 2008 (gmt 0)

But UK interest rates are set to fall

Hahaha. Because people never borrow more money to buy things they can't afford when it becomes cheaper to borrow, do they?

Don't kid yourself. By all measures, inflation is still rising and the BoE can't afford to give consumers more borrowing power without looking like it has lost the plot.

Holidays in Florida will remain very cheap for British holidaymakers for a couple of years to come.

I'm feeling a bit bearish at the moment, but basically I think everyone on the east side of the Atlantic can safely forget exporting the USA for the next half a decade. There is too much of a discrepancy between what Americans can afford to pay and what things cost over here in our own currencies (Sterling, Euro, Kroner & Franc).

By all means import from the USA but sell to Russia and the Persian Gulf states and perhaps to the new middle classes in India and China.

I'm waiting for Baidu to come out with a competitor to AdSense and then for the Yuan to be revalued. If Baidu has its relevancy algorithms up to scratch and finds ways to expand its advertiser base it might give Google some real competition >;->

And to our stetson-wearing friends: good luck with your economy, chaps.

HuskyPup




msg:3539669
 5:14 pm on Jan 3, 2008 (gmt 0)

ronin!

Did you write that or did you steal it from my porridge of a brain? :-))

Precisely the way I've been going for quite a while especially the PetroDollar countries/economies.

nomis5




msg:3539838
 7:40 pm on Jan 3, 2008 (gmt 0)

Ronin,

I admire your faith in the BoE to do the right thing! They sure looked after Northern Rock!

ronin




msg:3541052
 2:40 pm on Jan 5, 2008 (gmt 0)

Northern Rock should have been allowed to fail. Banks should not be forgiven for taking on risks they can't afford, otherwise there is no incentive should avoid such risks.

I suspect the BoE bailed out Northern Crock for one reason alone.

I cannot say for certain but I can guess that most people who had savings with Northern Rock had less than 30k in there, which is insured anyway so they would not have been out of pocket like the poor mugs who were conned into investing with Farepak.

Shareholders would have taken Northern Rock's collapse on the chin.

The party which most stood to lose was the current government which, I suspect, (again, conjecture on my part) feared a domino run on several more banks following a run on NR leading to its collapse. This, in turn, would have led to massive defaulting across the board.

So the government put pressure on the BoE to bail out NR to stop the trickle from becoming a deluge. Left to its own devices I think Merv's motley crew would have let NR die. That's my assessment at any rate. But I agree that the MPC are between a (Northern) Rock and a Hard Place as things currently stand.

If they keep interest rates steady, the dollar will keep falling against sterling.

If they pull interest rates down, the pound will fall against the dollar, which would be wonderful for anyone currently exporting to the States (including me) but inflation could spiral upwards out of control. And house prices might not correct as dramatically as they need to in order that an entire generation doesn't end up renting accommodation for the rest of their lives.

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