| 9:20 pm on May 2, 2009 (gmt 0)|
Google has made "poor" business agreements with large premium publishers resulting in same "pie" becoming smaller for the regular publisher....or....black holes have been sucking up Google revenues as we sleep:) <puts tin hat back on shelf>
| 9:21 pm on May 2, 2009 (gmt 0)|
|If you see other (good) reasons, list them. |
I can think of two good reasons off the top of my head:
1) FLEXIBILITY. Over time, it might make sense to encourage certain types of publishers, or to discourage others (e.g., via a quality score or content score of some kind). Or they might see value in having a sliding payout scale, with a bigger percentage to the top performers or--alternatively--with a bigger percentage to smaller publishers. By keeping the compensation formula secret, they can make changes to the formula without having Peter cry that he's being robbed to pay Paul.
2) COMPETITION. You claim that AdSense has no real competition. If that's true, one reason may be the fact that other CPC ad networks haven't been able to lure AdSense publishers away be offering higher payout percentages. Why should Google be stupid enough to make life easier for recruiters from wannabe competitors?
| 9:33 pm on May 2, 2009 (gmt 0)|
|the fact that other CPC ad networks haven't been able to lure AdSense publishers away be offering higher payout percentages. |
If the competition can earn you just $5 a month, then it doesn't really matter what percentage they take, does it?
(The competition would need huge ad inventory to be able to compete with AdSense. Nobody has that and I'm afraid nobody will in the following years.)
Anyway, consider the following scenario:
A big premium publisher (or rather a true partner), something like washingtonpost.com, tells Google, hey we don't want to give you 30% of our earnings anymore. We are going to give you just 10%. If you don't accept it, we'll leave you. Imagine a dozen of such partners saying that.
Naturally, Google doesn't want to lose them so they accept their terms. OK, but then they see they are not going to meet the market expectations. What could they possibly do about it? Yes, of course. They silently start taking more from the regular (non-premium) publishers. Easy and effective, isn't it? The market expectations are met, the overall earnings are not affected. The only losers are the publishers who suddenly earn 50% less without an obvious cause (which has actually happened to many publishers at least twice in the past 3 or 4 years, as far as I remember).
[edited by: true_INFP at 9:38 pm (utc) on May 2, 2009]
| 9:50 pm on May 2, 2009 (gmt 0)|
Google is now the scapegoat for the overall economy.
| 11:13 pm on May 2, 2009 (gmt 0)|
|A big premium publisher (or rather a true partner), something like washingtonpost.com, tells Google, hey we don't want to give you 30% of our earnings anymore. We are going to give you just 10%. If you don't accept it, we'll leave you. Imagine a dozen of such partners saying that. |
No one has that much clout with Google. Publishers use Google because it pays the best, but most publishers haven't dictated terms to Google. (There are rumors that NYT did, but you and I will never know.) These "big premium publishers" are working very hard to sell ads themselves to replace Google; but all they have to go on is past experience.
Which means there might be a little something to your theory. Does Google give a better rate to better web sites? I think it has been determined they do. But, that doesn't have anything to do with what we are talking about here.
(Keeping the players straight--I'm on the "It's the economy, stupid," team. Someone should list all of the theories and take a total.)
| 11:19 pm on May 2, 2009 (gmt 0)|
true_INFT, we've heard your "what if" scenario before, but if we're going to engage in pure speculation, my "what ifs" (a quality or content score of some kind, or a sliding scale) make more sense than your notion that Google is pulling a "reverse Robin Hood" (i.e., stealing from the poor to give to the rich). Why? Because some non-premium publishers are reporting increases in earnings per click and/or eCPM, and that wouldn't seem likely if mom-and-pop publishers being taxed to subsidize The Washington Post.
Still, if you think the explanation is that simple, you have an advantage over the rest of us: You don't need to waste time worrying about a weak economy, the possibility that AdSense impressions are growing faster than advertisers' budgets, competition for advertising dollars from vertical ad networks and targeted display-ad media, changes in the AdSense network since 2003, improvements in the tools available to AdWords buyers since 2003, or any other factors that a more analytical observer might take into account.
| 11:30 pm on May 2, 2009 (gmt 0)|
The score thus far (very subjective rating):
A) Google greed/wisdom-7
B) It's the economy, stupid-6
C) Too many web sites/ smarter ad buyers-5
D) Complex perfect storm-5
F) Who knows?-4
G) Lack of Google promotion-1
H) It's your fault-1
| 12:08 am on May 3, 2009 (gmt 0)|
You left out "Act of Go(D)ogle"
| 12:12 am on May 3, 2009 (gmt 0)|
I think it's mainly a combination of:
More publishers (many low quality) sharing the same pie, including the recent inclusion in the past years of giants with humongous traffic like youtube, myspace, etc. with poor performance. This may have a diluting effect on the overall content network. This could be fixed with making the criteria for becoming an Adsense publisher more stringent, and letting advertisers opt-out of particular huge social media sites that may be siphoning a lot of clicks.
Better tools for advertisers: site exclusion and site targeting, smart pricing for poorly converting publishers, smaller clicking area for banners, etc. This is a good thing in the long term and the interest in the network so we have to accept it.
And obviously, the economy, stupid. Nothing we can do here.
As for particular cases of huge drop in revenues, there may be some problem with the very complex algorithm at times for certain sites, letting in arbitragers or missing a beat or two when it comes to detecting a site's topic. Or a few important advertisers pulled out, for many reasons, one being that maybe Adwords has become too complex for many of them.
The honeymoon period of the first years is over, and publishers now must fight tooth and nails for their Adsense money.
If you make a new site, ask yourself the important question: would it be possible to monetize in a decent manner without Adsense?
| 12:32 am on May 3, 2009 (gmt 0)|
I'm not sure anything we list here can be held to be the "cause" of some of the drops, or gains, publishers report here.
There are just too many variables.
Even when a publisher states that they have "made no changes" I think there are still too many other possibilties to be able to absolutely identify the "real cause" or even the "primary cause" for any signigicant income changes, up or down... at least in many cases.
But just for kicks, I'll add another possibility to the list of candidates: Traffic source changes, or has that already been mentioned?
| 1:38 am on May 3, 2009 (gmt 0)|
Maybe Google could explain it better?
| 2:09 am on May 3, 2009 (gmt 0)|
1. It was higher years ago because it was new and advertisers did not know better to get out of it and did not have the ability to track like they can now. Not to mention you can bid real low on content network.
2. Smart pricing did not exist.
3. Google was not a public company. Now they are driven completely by greed and giving out money does not help earnings.
4. The ads were new and did not look like the tire old banner ads that everybody was blind to. Now people know what those ads are and are blind to them.
5. Site targeting hurts some people as well. You can bid real low by CPM and pay a lot less than you would per click.
I don't think the coupons had much to do with it. A few thousand dollars even ever month injected into the system would not affect things that much. Lots of people were making over $10k a month back then. I had a site that made $30k a month for a few months until my domain was hand banned. Now that google has more publishers they can be more picky. That is why they made smart pricing.
| 2:24 am on May 3, 2009 (gmt 0)|
Earnings rebounding today for me. At this rate, it's shaping up to be a normal day. Yay.
| 2:58 am on May 3, 2009 (gmt 0)|
true_INFP, yes of course the number of advertisers has also increased, however, the publishers outnumber the advertisers in my niche. Maybe that is not the same for everyone's niche, I only have knowledge of my own.
I don't have the answers here as to exactly what is happening, however, I know that part of the problem is having more publishers competing for the same ads and clicks.
| 4:48 am on May 3, 2009 (gmt 0)|
Traffic was probably better back then when the main SEO trick was to add keywords in the URL. Also, CTR was probably higher when most people didnt know what Google Ads were or what the pop-up banners were regardless of the fact that we were all annoyed by it.
|why you think AdSense earnings were higher before than now? |
I dont think the shareholders are happy either at least anymore!
|google is now a publicly listed company and they need to please their share holders more than us |
Wouldnt Google also benefit if they did something more about ad blindness?
| 5:33 am on May 3, 2009 (gmt 0)|
|Google has made "poor" business agreements with large premium publishers resulting in same "pie" becoming smaller for the regular publisher |
Do you know that or is it speculation?
| 6:05 am on May 3, 2009 (gmt 0)|
|yes of course the number of advertisers has also increased, however, the publishers outnumber the advertisers in my niche. |
It isn't just the number of publishers that has grown; the number of pages and impressions has grown even more. As someone else once asked here, "How many of you haven't added pages to your site?" I've probably increased the size of my own main site by 125 to 150 percent since I enrolled in the AdSense network back in 2003. Mind you, I'm creating original editorial content. If I were churning out computer-generated, keyword-driven "user review" pages and such, I could have generated millions of pages over the last six years--all of them with AdSense ads. And look at the megasites: A Google site: search on About.com shows 5.8 million pages., and a site: search on NYTimes.com yields 16.5 million pages. Even Suite101.com, which is a kind of minor-league About.com that runs AdSense ads, shows 2.8 million pages in a Google site: search. Those numbers represent a lot of nibbles at the revenue pie.
| 7:17 am on May 3, 2009 (gmt 0)|
|Google has made "poor" business agreements with large premium publishers... |
It's been widely reported that Google is losing money with MySpace and other social networks. Sergey Brin commented on the poor performance [businessinsider.com] of their guaranteed earnings payment to MySpace last year. Here is a quote (second half is a quote from Sergey):
|The increase in overall TAC rate was primarily related to the performance of a few AdSense partner sites, for which we are required to make guaranteed payments... I do want to highlight though, we have had a challenge in Q4 with social networking inventory as a whole and some of the monetization work we were doing there didnít pan out as well as we had hoped. |
From BusinessWeek [businessweek.com]
|When News Corp. reported its earnings, it said revenues for Fox Interactive Media surged 87%, to $233 million. But $62 million of that came from Google's guaranteed deal with MySpace. It's unclear whether Google, which ad experts believe is losing money on the deal, will sign similar agreements in the future. |
However it's also known that Google has been retreating from these deals and has been dramatically reducing it's losses from them. So maybe the best answer as to whether Google is being dragged down by partner deals is yes and no because it's been reported that Google is aggressively not renewing underperforming deals.
[edited by: martinibuster at 8:18 am (utc) on May 3, 2009]
| 7:49 am on May 3, 2009 (gmt 0)|
One big factor has been no more Internet doctor prescription drug ads for things like Oxycontin and weight loss pills.
I also think the novelty of text ads has worn off for readers, the economy is limiting advertising budgets and consumer interest in advertising, MFA sites and spammy ads even on good sites are conditioning readers to not bother to click on the ads, and Adwords users are probably getting more savvy about pricing over time.
| 8:24 am on May 3, 2009 (gmt 0)|
Web sites/pages multiplying faster than new ad dollars are flowing into the system via Adwords. Look at Alexa now and think about the list of top sites vs 2-3 years ago. How many of those sites even existed then, and how many of them were "huge". Every new Facebook or MySpace sucks up tens of billions of ad impressions a month and that's all money that's not flowing down to the smaller publishers.
Repeat that phenomenon all the way down the line, and we're likely to be talking about a universe of adspace that's expanded 10-fold or more in the last few years, whereas the expenditure on PPC has barely doubled.
| 10:35 am on May 3, 2009 (gmt 0)|
The ratio of publishers to ad dollars has changed over time. The number of sites has increased much faster than the number of dollars placed into advertising campaigns.
This ratio also directly affects ad blindness levels.
| 11:30 am on May 3, 2009 (gmt 0)|
One aspect I did not see mentioned is that our Firefox browsers uses nifty little addons, NoScript and AdBlockPlus, that blocks most ads plus there is a rather efficient windows hosts file application that sets googleadservices to 127.0.0.1
This allows the public to have the pleasurable ad, statistic tracking, cookie, and webbug free browsing.
| 3:33 pm on May 3, 2009 (gmt 0)|
I can only offer my opinion based on my experience looking at data going back to July of 2003.
Best year ever was 2005 with 2006 very close. I now have close to 100% more traffic, impressions are almost double, and CTR is averaging 1/4th of what it was. Actual amount paid per click has dropped by about 52%.
All ad design/colors, sizes, placements, and site design are currently exactly the same as in 2005, although I have tried other colors, placement, sizes without luck.
I would say people do not click on the ads for various reasons as they once did.
Is it the ad copy now being written (not enticing the users to click)?
Is it ad blocking?
Is it banner blindness?
Is it the economy?
In all probability it is a combination of all of the above.
I have never "blended" ads and they are easily seen as advertisements. Even with the reduced amount being paid per click, I would be VERY happy if my CTR had stayed the same along with doubling of the traffic/impressions I am seeing.
[edited by: The_Contractor at 3:34 pm (utc) on May 3, 2009]
| 5:41 pm on May 3, 2009 (gmt 0)|
I'm sure that the recession and an increase of AdSense publishers have been part of the problem, but I suspect a lot of publishers are experiencing the "circling the drain" phenomenon as well. CTD happens when something perceived as negative occurs, and the corrective action makes it worse but the original issue is blamed and more corrective actions are taken, making the situation worse yet. Pretty soon everything ends up going down the drain.
How I see this typically playing out with decreasing AdSense CPM is like this: A publisher sees lower CPM so they ad more AdSense ad blocks, which decreases CPM more. Then they add competing advertising products to try to squeeze as much revenue from their pages as possible, further decreasing AdSense CPM. Add page clutter and increased page load times, and CPM drops through the floor.
| 9:32 pm on May 3, 2009 (gmt 0)|
Good point dataguy, agreed.
| 1:15 am on May 4, 2009 (gmt 0)|
Your Theory Why AdSense Earnings Were Higher Years Ago?
'cause they counted all the clicks back then.
| 9:12 am on May 4, 2009 (gmt 0)|
Here is my speculation
1.An Increase in ratio of publishers to advertisers
2.Advertisers opting out of the content network since the option was introduced and new advertisers opting out of content because of the low ROI expectations they may have (which is based on the large number of substandard publishers)
3.Advertisers have been given more tools to optimise ROI yet publishers do not have access to optimisation tools and thus cannot optimise in order to adapt to the change in dynamics.
4. Change in algos - the determination of valid clicks and the operation of smartpricing has changed over time. The placement of advertisers has also changed and lower paying advertisers have been enjoying more exposure.
5.In some niches MFA's have made a negative and as a result many visitors do not click because they expect to be deceived into entering a landing page with nothing but ads.
| 11:17 am on May 4, 2009 (gmt 0)|
The main factor is that adwords have become more and more expensive per click over that period.
Hence, from an advertisers point of view you might be more likely to switch off the widening network and just limit it to buying so many clicks on google only esp if you have well worded adverts that attract high click rates.
This means that some of the prime high attractive high converting click adverts may not be displaying in your ad inventory streams and you find more of the advertisers that struggle to get conversions showing in their place
|clicksOver the past 12 to 18 months, I've seen earnings per click return to the levels of 2003 and early 2004. CTR, on the other hand, has declined, bringing down eCPM. |
I would agree with this comment and it echos my point that its because you are now having a higher percentage of less attractive adverts showing that your visitors may not wish to click on.
As click rates continue to increase this issue will get worse until google weed out more of the dross publishers that lower the ROI for advertisers hence putting them off using the wider network on their high converting adverts.
| 12:55 pm on May 4, 2009 (gmt 0)|
I don't think he is talking about the last year year. Those of us who did adsence back in 2003 2004 made considerably more than they paid in the last 2 or 3 years.
| 2:32 pm on May 4, 2009 (gmt 0)|
Now almost everybody have internet and more and more students around the world surf for fun, only to read and to copy&paste, I mean, "research"... for their homework.
Lots of this visitors are come and go. I have some tourism websites and they show the growth on traffic but is not directly related to income or sales. I also began to receive more and more emails but not asking for services, but for more info about the places explicitly for homework.
So, don't think your niche is not a case for study on certain schools. Remember, even if they click, those clicks surely won't mean a sale.
| 3:19 pm on May 4, 2009 (gmt 0)|
I believe it was in 2006 (?) when Google introduced link units and my earnings more than doubled. Then they changed the keyphrases shown on link units. Previously, if your site ranked top on "blue widgets" (d*mn widgets) then "blue widgets" would appear on top of the list of your main link unit. But then, people that had arrived on your site by searching on Google for "blue widgets" would again be confronted with another list of blue widgets links. So the change Google made was to not show your main keyphrases as links in link units, but more arcane, though related keyphrases. Clearly, the click rate will be much lower.
The pay-out per click has also halved since the economic turmoil.
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