|AdSense threatened by direct advertising?|
System: The following 4 messages were cut out of thread at: http://www.webmasterworld.com/google_adsense/4254632.htm [webmasterworld.com] by incredibill - 5:13 pm on Jan 28, 2011 (PST -8)
Adsense Advisor, The biggest threat to Google business model is not Bing but direct advertisement.
Case 1: For example taking keyword as " Office space #*$!X(any city)" Now if i put adsense ads on it i get appx $3 per click where as advertisers make a conversion Profit for around $10,000 for 20- 50 click. Advertisers will hide their profits by all means. They may not use analytics at all. So the publisher getting paid peanuts for his traffic, So the publisher thinking for himself, will remove adsense & will start doing direct business and make very high profit.
Solution to this problem: Adsense should go beyond auction & see in real life what is the true value of the keyword & fix a minimum amount. In this case atleast $20-$50 per click. Advertisers will always hide good source of profit for peanuts thrown. Result Google will lose the publisher & business.
Case 2:Suppose a big website owner for example in travel niche, #*$!xadvisor.com They will bid the highest dollars by less margin and get first position in auction always. Google will make money now but after 5 years people instead of going google will go directly to #*$!xadvisor.com and make booking, bcoz every few days they will be sending emails to customers acquired by Google network. Google will lose lot of business because it supplied heavy traffic for exchange of few extra cents.
Solution to this problem: Google Adword should limit traffic to big website & give even a small advertiser a chance even though he is bidding less, To save the system from falling into a situation that big website owner reach monopoly stage and no longer do business with Google.
Warning to Google: If Google keep cutting publishers money quarter after quarter just to make advertisers happy & Increase its profit, Google will end up in a biggest mistake of their life. Find the real value of click that will be fair business for all.
I somehow doubt that Google is worried about losing publishers -- there are thousands more waiting in the wings, and Google probably doesn't make all that much money from the content network after they've paid 68% to publishers and much of the rest in admin costs.
|I somehow doubt that Google is worried about losing publishers -- there are thousands more waiting in the wings... |
Very true. There are probably far more publishers signing up for Adsense in one day than the entire sum of publishers here on this forum. Publishers are an infinite resource in Google's eyes.
[edited by: Scurramunga at 10:07 pm (utc) on Jan 26, 2011]
adsense has more use to google than just earning money.
the days of search engines just getting their data from users that click on the serps is long gone. they need other ways to see what people are visiting and doing. they want google code on our sites. google has got loads of ways of doing it -- their toolbar, analytics, chrome, google maps... adsense is another way that they can get it.
I would say AdSense is definitely under pressure from direct advertisements because when the AdSense income slips, but the traffic doesn't, the obvious alternative is direct selling.
I do it, many others do as well, it's just a simple matter of surviving.
|The biggest threat to Google business model is not Bing but direct advertisement. |
That may be true for larger sites, or sites in high CPM niches, but for lower traffic sites in modest CPM niches I doubt there is much risk of publishers selling a significant amount of ad space on a direct basis.
Then the question becomes at what size or CPM level can a site actually profit from direct sales, and or attract advertisers.
Selling direct has a cost, it doesn't happen without time and effort being spent by someone at the selling site. That someone probably isn't working for free. On top of that, selling ad space isn't a skill free exercise, sure many can learn the skills needed, but that takes time, and that raises the specter of lost opportunity and income.
|Selling direct has a cost, it doesn't happen without time and effort being spent by someone at the selling site. |
My direct ad sales are 100% automated, but quite often people contact us to ask about special discount bulk buys and such.
Not only are my ad sales automated, just recently I updated the system so that AdSense ad blocks are up for sale, you can replace one with your own ads now, assuming you're willing to exceed the AdSense payout for that spot on the site.
How's that for a direct ad threat to AdSense? ;)
I'm looking more into direct advertisers, too. In fact, one came to us this week and paid 10% of what we earn from Adsense in a month. Nine more of those and I won't need Adsense anymore. And if you can provide quality traffic, direct advertisers will keep renewing each month, year, etc.
I have been giving it some thought lately, however this is not something I have done before.
That's impossible. An advertiser has to pay hundreds of dollars to show his banner on a top ranking website, that doesn't even guarantee his clicks. While in AdSense, he only pays for websites where he wants to advertise and his money are only spent if a (targeted) visitor clicks the ad.
Welcome To WebmasterWorld PascoalINC.
Yes you raise a good point and this is precisely one of the main (potential) issues which I have identified, that could prove to be an obstacle in my situation.
I guess the counter argument would be that the advertiser would enjoy constant exposure, making it a potentially valuable model for product branding, given the right circumstances with regards to price V's impression/clicks.
IMHO some advertisers are more comfortable on CPM basis or monthly payment for the spot basis than on CPC basis.
Many small companies dont understand or dont want to get into CPC and its related complications.(Daily Budget, Monthly Budget, GeoTargeting, Writing Ad copy and getting it approved etc.). Also they dont want to hire an Agency just for doing this.
They have fixed Advertising budget and they want to spend it without getting into complications.
They call up site owners or sales team to get their doubts clarified and get the things easily and quickly in no time.
Is it slowly shifting towards kind of newspaper model? Where you pay fixed cost per day for fix advertising spot.
Just my 2 cents based on feedback from some of the companies (advertisers) who contacted us recently.
do you use a custom solution to automate direct advertising sales or do you use a bought/licensed solution (if so which one?).
I am looking for quite some time now for something to automate this process.
We charge a flat monthly rate for direct advertisers. I have a fairly good idea how many clicks an advertiser will receive just by checking Adsense channel reports and our stats counter. And I have an idea how much they are paying because I'm getting 68% of it. So I charge them 80% or so of what they would pay Adsense. Not only do they not have to deal with a ppc campaign, but they are paying less (and we are earning more) because we've cut out the middle man.
Good, but let's consider both the situations.
#1 - AdSense
The user goes on a website via search, referring site, or direct traffic. From here we can understand that the visitor is interested in the site's content, niche or whatever. Than, he spots an advertising link/banner which he is tempted to click. Why ? 1. Because it's catchy. 2. Because he is interested in what the ad promotes. Here, we get targeting at it's most. Specially when the webmasters who place the ads do this after evaluating many positions, to determine a good click chance.
And one more thing, you can use direct advertising with AdSense too, for example if you choose to place an ad only on a single website (this method, in my opinion, it's the best).
#2 - direct advertising.
What is this ? Just like Star said, you pay x dollars so you will have the ad in a certain position. We will exclude the motivation of the publisher (the site owner) because he already got his money, so he doesn't care anymore about the ad.
Plus, the direct advertising methods are only used in top websites, while AdSense it's approved and constantly used on hundreds of thousands of websites.
Major misconceptions here.
|What is this ? Just like Star said, you pay x dollars so you will have the ad in a certain position. We will exclude the motivation of the publisher (the site owner) because he already got his money, so he doesn't care anymore about the ad. |
Sorry, but us small site owners care way more about the advertiser getting the most bang for his buck than big sites or AdSense/AdWords ever will. I've helped people get the proper ad placement, after seeing the ads purchased, where I know they'll get the most traffic/clicks/ROI simply because I know my site best. I've also recommended changes to ads, recommended some banner maker I know for people not doing a good job at rolling their own, and in a couple of extreme cases even wrote a couple of text ads for customers!
Think AdSense does that?
Not like we spend much time dealing with this because most adverts are what they should be, placed where they should, but we keep an eye out for issues that need some TLC because I wanted repeated sales, not just a one-time sale.
A little customer service pays well too because my longest non-stop advertiser in my recurring billing system has been there 7 years, most of them have been with me over 2 years. That's right, recurring income, some pay monthly, others buy in bulk for discounts and recur quarterly, bi-annually or annually. I can depend on them for a steady income like clockwork, pay the bills, plan ahead.
|Plus, the direct advertising methods are only used in top websites, while AdSense it's approved and constantly used on hundreds of thousands of websites. |
My site and my competitors aren't big sites, but every single one of them offers direct ads. However, my competitors and I dominate our niche in top 10 SERPs which is why advertisers like us opposed to being placed randomly on any old AdSense site.
Some offer just banner ad buys, sponsored links or paid listings, others (like myself) offer a more complete solution with multiple ad location placement, specific pages, run of site, whatever you want.
|do you use a custom solution to automate direct advertising sales or do you use a bought/licensed solution (if so which one?). |
I am looking for quite some time now for something to automate this process.
Completely custom solution plus OpenX
To get started you really don't need complete automation to test the concept or start making money, just a shopping cart to sell ads, PayPal will work. The customers email you the ad content, you post the ads when they show up in your inbox ;)
The real goal, IMO, is to push recurring ads, as those add up over time as you gain more and more advertisers.
Advertisers don't always know if you're running other company ads or affiliates so pre-populating an ad system with affiliates will start the ball rolling. Some advertisers have even offered to pay to "replace" a competitors affiliate. Besides, affiliates makes a good ad system fill for remnant inventory.
When looking at what placement advertisers are paying vs. what contextual advertisers are paying, I estimate that if all of our ads were from direct advertisers, we'd be earning 2 to 3 times what we are earning with Adsense.
I have people climbing over themselves to put direct advertising on my sites, and this year for the first time I hope to have a system in place to do it. My sites are not large, mostly seasonal, mostly local-focuses (although different locations). The people who want to advertise on them are also doing yellow pages, print ads and billboards - not what you'd call targeted advertising - so they don't care about targeted clicks or advertising via AdWords. My users will already be way more targeted than what they've been doing.
Anyone who thinks direct advertising is only available for top sites ain't doing his homework.
after adsense, I would put affiliates, then direct advertising.
someone just starting out can put affiliate banners on their site.
after they get some traffic, direct advertisers would become interested.
|Sorry, but us small site owners care way more about the advertiser getting the most bang for his buck than big sites or AdSense/AdWords ever will. |
As a site owner I would want to ensure my customer was completely satisfied and would not proceed if it were likely to be otherwise. I know the approximate range of impressions any page URL receives. Any potential customers looking for good CPM exposure would find themselves on a nice prominent piece of real-estate for a carefully targeted range of keywords falling within my niche. I do know roughly how many clicks certain ad slots can be expected to receive and would probably start out by initially charging for the lower range until I analyse performance of the new ad copy in more detail over time .
Wow...I think I am talking myself into a new venture ;-}
|would probably start out by initially charging for the lower range until I analyse performance of the new ad copy in more detail over time . |
I did that once - it's easier to charge a little extra and negotiate a discount than it is to raise prices. Still have recurring payments of grandfathered advertisers of those older lower rates.
|it's easier to charge a little extra and negotiate a discount than it is to raise prices. |
That sounds sensible. Nothing drives away customers faster than a price rise whilst everyone loves a discount.
Point noted (with thanks)
the biggest problem I have with direct advertising is that when advertisers don't knock on your door it is hard to get them advertising on your site in the first place.
If you don't have a sales team or can do the bell ringing yourself (which costs a lot of time in my experience) I find it hard to get the ball rolling.
I am however in the lucky position that AdSense pays CPM prices on my site that are not much behind market prices for direct sold ads so AdSense currently works good for me.
Any tips on how to attract advertisers besides by sheer size and becoming the big dog in your niche?
|Adsense Advisor, The biggest threat to Google business model is not Bing but direct advertisement. |
Thank you. I'm headed that direction already.
Having seen a 500% loss in adsense earnings over the years in spite of increased traffic and exposure this is the way I am moving now.
I will share with you a system used to get Direct advertiser calling you!
I tried this a while back. it cost no money, but it's a risk, but i seen single ad units on one page sale for $25-$50 a month.
find a high traffic page on your site. One the earn average $10 to $15 from Adsense.
Look at who is bidding on Adsense Unit around the 2nd 3rd spots.
If they're a small to medium business choose them. Large business won't work as well.
Remove the Adsense unit and put a single ad for that Advertiser "using their exact ad text or improve it, and maybe put an image near it". use a Google looking ad spot "same text, colors etc"
Go to Google URL builder.
Build a URL
Campaign Source: yoursite.com
Campaign Medium: limited-time-free-traffic
Campaign Name: contact-for-ad-rates.
Send them 2 weeks to 1 month of free traffic and wait for them to contact you.
1. If your traffic convert for them, they will contact you and want to buy the spot "let them know you plan on testing other advertisers if they don't want to buy the spot"
2. If the traffic doesn't convert or you haven't heard from them in 1-2 weeks, try a different advertiser.
When the advertiser see a new campaign show up in their analytic report, they will trace where it came from. If it good traffic and they like it they will def buy it. Since they seen results before they paid they will usually pay a lot of higher, Depending on the niche and cost of the product you could make a ton.
it would also be a good idea to create an Advertise with us page, and let them know what you're doing "You're feed up with Google Adsense and unrelated ads,limited time traffic to find advertisers, uncompetitive ad spot, with unlimited impressions, and click, month to month contract with bulk discounts"
If your site is very niche and contain "Buy" niched pages you can sell space easy. If you site is very generic or MFA this won't work as well.
I seen one spot on a single page sold for $50 a month "300X250" ad unit that received around 500 organic search landings a month, but the site it's self didn't rank in the top 5 of google.
With this approach you can sell ad space on individual high traffic page, and not domain wide, and instead of trying to sell your "Site" to advertisers, your selling single page spots based on results "from the trail period of traffic". You can also sell multiple pages. So if you have 250 pages, and 50 high traffic Traffic "Buy" Themed page you can possibly sell 50 individual ad spots, and use Adsense on the other pages.
Also this works for call to action advertisers, not so much for advertiser who want to brand.
Also offering net 30 term greatly increase chance of selling ad, and can increase how much you can ask for "Get traffic before you buy"
it's also a good idea to evaluate the expected profit of the product. Someone selling $4,000+ used motorcycles who can make 1 conversion from your traffic in a month would be willing to pay $200 per month, but someone selling $19 iphone case probably wouldn't.
Hope this gives you something to think about.
I have made $1620 this month by just one site by removing adsense and doing direct business, If i used adsense i would have made hardly $50 for that site. Adsense still pays way way behind in real estate category.