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This 31 message thread spans 2 pages: 31 ( [1] 2 > >     
Theory on Lowered Adsense Rates
KidCroesus




msg:3578844
 3:29 pm on Feb 19, 2008 (gmt 0)

I have a different theory as to why adsense rates are dropping. Coinciding with the change to the clickable part of the ad in November, Google made another change to their policies that I believe has had a drastic effect on adsense revenue.

Google had been offering a program called Site Targeting that allowed advertisers to buy a site on a CPM basis. That program had been generally quite beneficial for publishers, as it would create an artificial CPM floor below which an impression could not fall. In other words, if an advertiser bought your site directly with a $2.00 CPM ad, google would show the $2 CPM ad unless the expected value of the keyword ad exceeded $2, in which case they would show the keyword ad.

Around November 15th, Google changed that policy. Now advertisers could also buy a keyword ad directly on a CPC basis. I believe that has accidentally wreaked havoc on Google's auction system, driving down demand and therefore prices for keywords.

In other word, lets say I am an advertiser looking for the keyword "diabetes". In the old days, to get that keyword, I had to buy the entire google network, including the "made for adsense" sites. Now, I can just buy 50 sites I trust.

What happens is that the revenue for trusted sites remains high, but the overall competition for the word diabetes decreases, and the law of supply and demand drives down the price of the keyword "diabetes".

If enough advertisers shift to a targeted strategy, then eventually the total number of keywords advertised in the marketplace begins to drop, and google's ads become less contextually relevant.

Just a theory -- anyone think there is anything to it?

 

KidCroesus




msg:3578850
 3:34 pm on Feb 19, 2008 (gmt 0)

By the way, here is the change I was referring to:

[adsense.blogspot.com...]

[edited by: jatar_k at 3:41 pm (utc) on Feb. 19, 2008]

europeforvisitors




msg:3578853
 3:43 pm on Feb 19, 2008 (gmt 0)

I have a different theory as to why adsense rates are dropping.

Any number of publishers have reported that their AdSense earnings per click, eCPM, and/or total earnings are up, so the notion that "AdSense rates are dropping" is hard to prove.

It's certainly possible that changes to the bidding system, site-exclusion filter, smart pricing, ad-allocation formulas, etc. may have favored some publishers at the expense of others, but that doesn't mean demand is down. Far from it: Google's revenues from AdSense programs continue to grow every quarter, and so do overall payouts to publishers.

We may be seeing a gradual shakeout and a growing spread between the "haves" and "have-nots," but that's part of the maturation process. Online media are simply becoming more like traditional media, with ad rates that reflect audience and performance.

Hobbs




msg:3578890
 4:33 pm on Feb 19, 2008 (gmt 0)

.. Or there's a micro shaving code running atop of smartpricing that diverts a percentage of the deductions into a bank account in the cayman islands, which in turn is being invested into several online gambling operations, and from there into a swiss bank account with an automatic reinvesting in the stock market standing order under several names, then all the proceeds converge into another swiss bank account owned by pinky and the brain to take over the world.

greatstart




msg:3578895
 4:37 pm on Feb 19, 2008 (gmt 0)

I like Hobbs theory the best. It's hilarious!

zett




msg:3578909
 4:50 pm on Feb 19, 2008 (gmt 0)

EFV:

Far from it: Google's revenues from AdSense programs continue to grow every quarter, and so do overall payouts to publishers.

Please have a look at message # 3564257 again and the thread its embedded in, where I quote Google (!) stating that the overall TAC increase is directly linked to a few preferred partner sites who get a guaranteed payment.

No, it's not some moron in some forum making that statement, this statement was coming directly FROM GOOGLE. So why are you still claiming a perfect world, where this world seems to be perfect just for a few publishers (those with guaranteed payments)? (And no, please do not tell me that the fact *is* that the overall payout increased. That may be so, but it is 100% irrelevant for this discussion.)

ronin




msg:3578914
 4:53 pm on Feb 19, 2008 (gmt 0)

KidCroesus, you may have hit the nail on the head with this comment:

What happens is that the revenue for trusted sites remains high, but the overall competition for the word diabetes decreases [...]

(My emphasis).

If merchants are cherry-picking sites in the publisher network to display their CPC ads, might that explain why some publishers (not necessarily just those with guaranteed payments) are seeing their revenues continue to increase while others are seeing their overall earnings fall?

Are we seeing the Rebel Alliance of self-published Journalists and Writers take on the Empire of Dodgy Marketeers with the assistance of Google-Wan Kenobi?

Good one, ronin, that'll make you lots of new friends then...

[edited by: ronin at 5:03 pm (utc) on Feb. 19, 2008]

ann




msg:3578925
 4:59 pm on Feb 19, 2008 (gmt 0)

Hey Hobhbs,
(laughing too hard to type straight)

Something like a 'Pedegg' sitting up there?

Ann

potentialgeek




msg:3578946
 5:15 pm on Feb 19, 2008 (gmt 0)

Cherry-picking should have started long ago. That's how the offline companies operate. The whole idea that you're either in the Content Network (and have ads appearing on any site, very good or absolutely horrendous), or not, was lame.

The more targeting (fair business) Google allows, the higher quality your site must be. If you think long term, you really need to focus on high-end web design and content.

MFA sites will die not by Google Adsense Police but the advertisers killing them off (directly/indirectly).

Perfect white list and black list combinations are the future of AdWords/Adsense.

p/g

europeforvisitors




msg:3579065
 6:50 pm on Feb 19, 2008 (gmt 0)

A while back, Google announced that it was going to implement site targeting of contextual ads. That hasn't happened--not yet, anyway--but if it does, expect to see the AdSense network become even more like traditional media (where audience quality, editorial quality, and performance have huge impacts on CPM).

And Zett, you can complain as much as you like about Google's relationships with premium partners, but that won't explain why some mom-and-pop sites are seeing EPC gains of 60% or more over the same period last year.

CentennialEmpire




msg:3579207
 8:24 pm on Feb 19, 2008 (gmt 0)

We decreased our Adsense impressions significantly even since Adsense earnings plummeted at the beginning of the year.

And what happens? Our rep finally realizes something is up and comes running wondering why we're not providing as many impressions as we once were. He never bothered to answer our emails concerning the reduced earnings, btw. Eventually I managed to get it out of him that our site benefited substantially from ads targeted directly at our site (akin to KidC's "CPM" theory) and unless we maintain our impressions, it may be difficult to secure more targeted advertisers to bring our earnings back up (but now as CPC ads, not CPM).

I think the "CPM" theory is the best I've heard yet. We actually have several targeted advertisers on our site already but we're not getting anywhere near the eCPM we once were, so CPM adverts morphing into CPC adverts seems very plausible.

[edited by: martinibuster at 10:22 pm (utc) on Feb. 19, 2008]

koan




msg:3579223
 8:37 pm on Feb 19, 2008 (gmt 0)

CentennialEmpire, but you never got out of him why the earnings initially plummeted, before you started reducing impressions?

HuskyPup




msg:3579396
 10:26 pm on Feb 19, 2008 (gmt 0)

Now advertisers could also buy a keyword ad directly on a CPC basis. I believe that has accidentally wreaked havoc on Google's auction system, driving down demand and therefore prices for keywords.

I find one flaw in this idea and that is the notion that many advertisers in many different industries comprehend how AdWords works and functions.

IMHO, they don't, many widget sectors' advertisers are small to medium B&M businesses not using agencies nor really understanding the complexities of AdWords.

I know that many in my sector use it like Classified Ads however with accurate reporting and jusitfiable, to themselves, ad expenditures.

I'll give you one to ponder!

EPC has gone down in some sectors since many of the companies operating in it are so busy they do not need to advertise at the present time thus leaving the arena open to lower bids.

All I know is that my EPC so far this month is doing well but it is a leap year therefore anything could happen!

CentennialEmpire




msg:3579662
 4:06 am on Feb 20, 2008 (gmt 0)

Koan, I believe it's not that we lost advertisers, it's just that they switched from CPM to CPC campaigns. So in order to bring our rates back up, we'd need to secure a lot more targeted CPC campaigns to drive up the rates even higher and reach our previous earnings. I think that's why the rep was concerned about our sudden decrease in Adsense impressions.

While our CTR has remained fairly steady, CPM campaigns were obviously very competitive and had good rates above and beyond the rest of the CPC ads. I guess in the past we'd receive money if these campaigns were running while now the ads can cover our entire site but our revenue doesn't compare.

In the end we lost out and cut our impressions, and as a result those advertisers no longer have the exposure they obviously were willing to pay a good sum of money to secure.

darkmage




msg:3579690
 5:10 am on Feb 20, 2008 (gmt 0)

KidCroesus:

I agree to some extent. I like the logic of your argument. It can also explain why some sites within the same topics suffer while others benefit. I certainly saw a hiccup in November that established a new floor - but I got both lower CTR and lower CPC. I put it down to the new click zones. The CPC site targetting, of course, is another factor that is making it hard to really know what is going on with Adsense.

Have you run a report looking at just CPM versus time? You have to export the data and strip it, but it is interesting.
Question: should the CPM drop at the same time as CPC, or lag behind?

loudspeaker




msg:3579744
 7:04 am on Feb 20, 2008 (gmt 0)

Eventually I managed to get it out of him that our site benefited substantially from ads targeted directly at our site (akin to KidC's "CPM" theory) and unless we maintain our impressions, it may be difficult to secure more targeted advertisers to bring our earnings back up (but now as CPC ads, not CPM).

I have the impression they are being trained to say that. And this logic is questionable, anyway: "well, your CPM is low, but give us MORE of your inventory and then MAY BE that will somehow make it higher".

And what if it doesn't? No thanks, guys, that's not how it works - in fact, it should be exactly the opposite. Make it HIGHER and THEN we're going to shift more impressions to AdSense (which hopefully doesn't lower it in turn).

P.S. I do think there may be something to the theory in the original post. Thanks for sharing!

KidCroesus




msg:3580103
 3:37 pm on Feb 20, 2008 (gmt 0)

Thanks to all for your comments and thoughts.

I had actually assumed that the new CPC ads were in fact keyword based and contextually targeted, as well as site targeted. This might create the drop in price in the general marketplace, due to a downward shifted demand curve, as advertisers moved to the new secondary marketplace of premium sites.

But EuropeForVisitors comment gives me pause. He suggests that while advertisers can run CPC ads on a site-targeted basis, they aren't yet contextual.

A while back, Google announced that it was going to implement site targeting of contextual ads. That hasn't happened--not yet, anyway--but if it does, expect to see the AdSense network become even more like traditional media (where audience quality, editorial quality, and performance have huge impacts on CPM).

I had actually assumed that exactly this phenomenon had already come to pass.

Google recently gave us the ability to see who is specifically targeting our site and shut them off (this is rolling out to most folks); I see all kinds of strange and crummy ads that are targeted to our site each day, on what I have to assume is a CPC basis (Chinese ads, herbal cures, etc.) Nearly thirty to fifty new ones every day.

We also get some quality ads that I assume are on a CPM basis, as they show up quite often on our site. (Kashi, HBO, etc.)

Since I don't generally see the crummy site targeted CPC ads (herbal cures) on our site, I have generally assumed they are targeted geographically, and presumably by keyword as well.

So can anyone tell me if EuropeforVisitors is right or wrong?

What options are currently available on the Advertiser side on how you can site-target a site?

KidCroesus




msg:3580116
 3:51 pm on Feb 20, 2008 (gmt 0)

By the way, I also think Centennial Empire is right on as well. Just the shift of a number of site-targeted advertisers from CPM to CPC really hurt us.

greatstart




msg:3580165
 4:54 pm on Feb 20, 2008 (gmt 0)

So can anyone tell me if EuropeforVisitors is right or wrong?

As someone else mentioned on this forum a long time ago:

Rule #1 - Europe for Visitors is always right.
Rule #2 - If Europe for Visitors is wrong, see rule #1.

europeforvisitors




msg:3580182
 5:12 pm on Feb 20, 2008 (gmt 0)

But EuropeForVisitors comment gives me pause. He suggests that while advertisers can run CPC ads on a site-targeted basis, they aren't yet contextual.

I had actually assumed that exactly this phenomenon had already come to pass.

Here's what Google has to say [adwords.google.com] about CPC placement targeting.

Note that Google distinguishes between "placement" (site) targeting and "keyword" (contextual) targeting.

If and when Google offers a blend of placement and contextual targeting (i.e., opting in to sites with contextual ads, instead of merely opting out via the site-exclusion filter), things may get interesting.

kool002




msg:3580307
 6:56 pm on Feb 20, 2008 (gmt 0)

"Rule #1 - Europe for Visitors is always right. "

Hehe Thanks for reminding...I almost forgot

Mr_Smithee




msg:3581549
 8:52 pm on Feb 21, 2008 (gmt 0)

If advertisers start to cherry-pick and choose sites, why exactly do they keep paying the middle man? Wasn't the point of the content network to delegate the work of finding appropriate content to a clever algorithm running on Google's computers?

As far as I am concerned, Adsense is dead. Whenever I get the selection and placement right to bring the eCPM up, something changes and I'm back in the swamp. As long as I can't set my limits like Adwords users can set theirs, I'm not going to reenable the Google ads. If they decide they don't want to pay keyword targeted sites the same money as a small list of manually vetted sites, then I want to decide that my site is not available for penny-click ads and I want that decision to STICK without me chasing after every algorithm tweak and junk ads.

europeforvisitors




msg:3581597
 9:50 pm on Feb 21, 2008 (gmt 0)

>> If advertisers start to cherry-pick and choose sites, why exactly do they keep paying the middle man?<<

Because the middleman (Google) acts as an aggregator and intermediary.

Wasn't the point of the content network to delegate the work of finding appropriate content to a clever algorithm running on Google's computers?

Sure, but AdSense has been refined since it was was launched in 2003, and there's no reason why the basic version 1.0 product shouldn't be improved or enhanced with product extensions. More choices for advertisers = more advertisers and more revenue.

As far as I am concerned, Adsense is dead.

And maybe it is dead--for you. If it is, you're right to bury it and move on.

tim222




msg:3581772
 2:21 am on Feb 22, 2008 (gmt 0)

...I have generally assumed they are targeted geographically, and presumably by keyword as well.

So can anyone tell me if EuropeforVisitors is right or wrong?

I just went into AdWords and created a placement-targeted CPC ad, and there was no place to define keywords. It allows the usual ad text, then it lets you choose which sites you want your ad to appear. It also lets you define a dollar maximum per day, and max cost per click. But no place to enter keywords. So it appears that Rule #1 applies here :)

MikeNoLastName




msg:3584615
 3:27 am on Feb 26, 2008 (gmt 0)

Does it allow you to enter a full url to a specific page on a site (which does not specify chanels) or just to a website domain?

tim222




msg:3584683
 5:50 am on Feb 26, 2008 (gmt 0)

Does it allow you to enter a full url to a specific page on a site (which does not specify chanels) or just to a website domain?

You don't have the option to type the destination URL. You choose the destination from a list. You can search for a specific domain, but then you can only choose either the whole domain, or specific pages that the publisher has made available via channels.

fearlessrick




msg:3584865
 11:41 am on Feb 26, 2008 (gmt 0)

I have to agree that whatever site-targeting is occuring, it has tanked my earnings. I had opted out of site targeting by emailing Google about 18 months ago. I recently (December) switched back and have seen my average eCPM drop by about 33%.

ann




msg:3584897
 12:27 pm on Feb 26, 2008 (gmt 0)

FR,

I did the same but wasted no time in having it cut off again.

A difference of night and day.

Ann

andrewshim




msg:3584956
 2:00 pm on Feb 26, 2008 (gmt 0)

I have to agree that whatever site-targeting is occuring, it has tanked my earnings. I had opted out of site targeting by emailing Google about 18 months ago. I recently (December) switched back and have seen my average eCPM drop by about 33%.

Could be why my eCPM has tanked too beginning Feb 19. Will switch off targetting and see what happens.

ken_b




msg:3585076
 3:31 pm on Feb 26, 2008 (gmt 0)

I had opted out of site targeting by emailing Google about 18 months ago. I recently (December) switched back and have seen my average eCPM drop by about 33%.

Site targeting apparently effectively sets a floor price on my site. Turning it off is out of the question at the moment (things changes, so the future might be different).

I did try turning off image ads in December and took a hit of around 25%, if I recall the % right. Needless to say, I turned images back on in a hurry.

Which only shows how differently these things can affect different sites I guess.

This 31 message thread spans 2 pages: 31 ( [1] 2 > >
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