Forum Moderators: martinibuster
That said agree with greg....the bottom line is the money made....not the percentage paid out. We carefully watch the bottom line along with ecpm and dollars by unique to determine if adsense is for us....versus an alternative offering.
I do agree that, for the individual publisher, bottom-line revenues are what matter.
that growth is not a significant factor, because for one thing, you don't have a clue how google pays their tac partners:
"A lot of media companies, such as the New York Times feature Google ads prominently on their online sites. In some cases Google hands over as much as 100 per cent of the revenues to key partners. It does this to gain distribution and it is also able to grab the customer relationship through its "advertise on this site" feature.
...TAC costs in Q4 decreased "reflecting primarily the continued shift in our revenue mix from Google network revenue to Google-owned site revenue."
efv, when do you ever see publishers like us getting 100% of the ad revenue? never!
that's why the tac numbers you are using to compute what google pays us publishers is not relevant info.
that's why the tac numbers you are using to compute what google pays us publishers is not relevant info.
It's highly relevant information, because:
1) So much misinformation is bandied about on this forum (such as the 33% figure that you quoted in another post).
2) Quarter after quarter, we see posts by uninformed or malicious members who claim that Google has "cut the payout." The quarterly earnings report show that such claims are simply wrong.
By the way, I don't think anyone here has ever asserted that all publishers are paid an equal percentage. I've often said that Google's compensation is unlikely to be a straight percentage split. Why should it be a straight percentage split? It makes perfect sense for Google to have a sliding scale or (more likely) an even more complex revenue-share formula to achieve its goals for the network. Book publishers seldom pay flat rates, commissioned sales reps often have sliding pay scales, and some other ad networks pay varying percentages according to predetermined criteria.
In any case, Visi makes a good point when he says that bottom-line revenues are what matter. Google tells us the eCPM and revenues that we're earning from the "Ads by Google" boxes on our sites, and it's up to us to decide whether those numbers are adequate. Publishers who aren't happy with their earnings have only themselves to blame if they aren't smart enough to remove ads that don't pay.
efv, here is the percentage breakdown that will disprove your growth theory logic:
"Revenue from Google's own properties generated just over a billion, or 57 per cent of all gross income, with its Adsense program snaring 42 per cent.
The former, which provides Google with much higher margins than the latter, rose 112.5 per cent year-on-year, compared to a 72.9 per cent increase in AdSense." -theregister dot co dot uk, 2/01/06, andrew orlowski
notice how every data source that i've posted jives with the other? adsense publishers are getting the short end of the stick, because google makes a lot more money advertising on it's own properties... that's where they have been growing their business all year long, at our expense.
so you must diversify into other ad networks... it's the same good advice that people have been giving out here for years.
adsense publishers are getting the short end of the stick, because google makes a lot more money advertising on it's own properties... that's where they have been growing their business all year long, at our expense.
How are they growing that business "at our expense"? A rising tide lifts all boats.
On my own site, the year-to-date EPC for 2006 is up 13.3% over the same January 1-February 23 period last year. Total revenues are up 16.4%. It's hard to see how I'm being hurt by advertising on Google's own properties.
If your AdSense revenues are declining, there could be any number of reasons--and the growth of Google's in-house advertising revenues is unlikely to be one of them.
"Google reports its revenues, consistent with GAAP, on a gross basis without deducting traffic acquisition costs, or TAC. In the fourth quarter, TAC totaled $629 million, or 33% percent of advertising revenues.
danimal, you must have missed my response when you posted that in another thread. That 33% refers to TOTAL revenues, including the search network, where of course TACs are 0. So the percentage for the content network alone is considerably higher--and that gets us back to the 77% or slightly higher figure that you get when you figure what Google's TAC costs are for the content network alone.
Danimal, I believe that you are misreading Google's report. That is 33% of ALL advertising revenues. More than half of Google's revenue comes from its own sites where the TAC is 0%.
You need to apply TAC ONLY to the AdSense revenue to get the proper distribution -- and you will see that it is in fact in the 78% range as the company (and many of us) have posted.
No need to get defensive about this. We're all learning together here.
>>>You need to apply TAC ONLY to the AdSense revenue to get the proper distribution<<<
so where does google take it's share for profit? how much of your 77% leftover pays for the 8% r&d cost that google incurred in q4?
per George Reyes: "at Google, cost of revenue is comprised mainly of traffic acquisition costs, or TAC, expenses associated with the operation of our data centers, credit card processing charges, and amortized expenses associated with purchased and licensed technologies."
But I have to say, I wouldn't care if Google was only passing through 20% of what advertisers are paying for clicks on my site, because I'm making such good money. And I'm making such good money, I find it hard to believe that Google could possibly be keeping as much as you seem to think.
Why? Because if they were, I'd be getting bombarded by requests from advertisers in my niche, wanting to do direct advertising.
it is clearly above and beyond the tac... it's an added expense, some portion of which comes right out of the 77% that so many people have been claiming that adsense publishers are getting.
the obvious point is that the 77% is an absurd figure that cannot be substantiated.
This shows that GOOG is accelerating its revenue shift from network sites.
Google would be "shifting revenue" only if AdSense network revenues were declining at the expense of Google's own revenues. And that isn't happening. AdSense revenues are increasing, both at the network level and--in many cases--at the individual site level. (Your own personal mileage may vary.)
As for your skepticism about Google's payout percentage, what more can anyone say? Nobody can force you to believe Google's quarterly statements to investors and the SEC.
BTW, there's nothing new about the idea of diversifying: Having multiple revenue streams is a good idea even for publishers who are doing well with AdSense--not just to minimize risk, but also to maximize income.
I've said it before that I know for a fact that some premium publishers don't even get 70% but it's possible real big fish like AOL get a lot more. Based on a couple of experiments I ran using AdSense/AdWords early on it looks like it's 60% so I think it's safe to assume it's somewhere in the 50%-65%. On my silly test my $0.05 ad got a $0.03 payout but if I were to attempt this again I'd bid $1 per ad just to see what smartpricing did if anything to the results.
Run your own test, it's simple.
Site target your own website, I'd coordinate with a couple of friends so it's not obvious what's going on, for a specific term on a specific page that nobody can get to except you. Make sure that page has a channel to monitor it specifically. Now load the page once to get mediabot to crawl it and then monitor the page later until you see your ad show up and ONE CLICK will answer your question. How much did they charge your AdWords account vs how much did they pay your AdSense account.
You'll get an answer and since it's your money no advertisers harmed in the process.
My goodness the masses of misinformation is staggering for a single thread.
Bill, you write a lot that I do not agree with, but I have to go with you on that one.
Like Visi, I'd rather focus on the bottom line. Either my eCPM and monthly revenues are adequate, or they aren't. And if they aren't--whether overall or for a channel--it's simple enough to take corrective steps.
efv, i'm still waiting for someone to tell me what portion of adsense revenue google took for themselves as profit... what portion of adsense revenue paid for some of that 8% r&d... what portion of adsense revenue went towards "expenses associated with the operation of our data centers, credit card processing charges, and amortized expenses associated with purchased and licensed technologies."
efv, you told us that tac was deducted from the google adsense revenue, now where are the rest of google's adsense expenses deducted at? if it's in google's quarterly filings like you claim, give us the numbers... either it's coming out of that 77%, or it's not.
- revenue from google pages grew at a higher rate than adsense partners revenues (gross) Interpitation more direct revenue stream to google on search based ads.
- percentage of costs allocated to TAC (whatever that includes) has been about 77-78% through all the financial reports and is representative of costs allocated to the adsense distribution to the gross revenue of the adsence portion only.
- I know that in a previous financial report that I read in detail that the TAC encompasses more than simply dollars paid out to publishers including new equipment, some beta programs and overhead allocations. The details of TAC seems to be harder to find this time around?
- real money paid out has never been published since google's financial reports started. However what EFV is pointing out is the overall cost allocations to this program have stayed constant is all, and he is correct in that statement (compare financial reports to see this)
Again who really cares? This has been beaten to death on this board...it just doesn't matter. Google all of a sudden says it's 75% then what? They decide to serve me 50% PSA's (read other programs default ads) and what is my true payout? All that matters is the cheque at the end of the month versus what others will pay for the web real estate I choose to sell them.
A look at the gross numbers and ratios is located at [investor.google.com...]
For one thing, how do you "site target" with CPC ads
I did this before CPM site targetting even existed so I'm tossing around a term that currently has a different meaning. My keyword was just a BS term so the ad was pretty much site targetted if you get my drift.
OK, without spelling out exactly what I did on my test in step-by-step paint-by-number instructions with the keywords and everything, I picked a VERY OBSCURE WORD that had little or no advertising on it and then make a page designed just to pull in those words.
That's it, nothing special.
Your payout percentage might be higher or lower depending on your gross revenues/CTR/whatever at any point in time.) Sounds like too much work for zero return.
If 10-20 sites tested using this method we'd quickly discover if a sliding scale existed, you volunteering?
If 10-20 sites tested using this method we'd quickly discover if a sliding scale existed, you volunteering?
I'm not curious enough to go through the hassle. As a publisher, I care about two numbers: eCPM (which allows me to compare AdSense's performance with other revenue streams on my site) and total revenues (which are what pay the bills).
I'm not curious enough to go through the hassle.
Of course not, we'd rather go thru this same thread 100 times again this year.
No hassle there ;)
the reason it's important is because, as we've seen thruout this thread, people insist on posting false info about adsense...
Yes, such as that 33% figure that was tossed about earlier, or the frequent complaints on this forum that Google has "cut the payout" to keep Wall Street happy (which is demonstrably false, since the share that Google pays to partners has been remarkably consistent from one quarter to the next).
how are noobs supposed to make the right decisions?
Decisions about what? Whether to keep AdSense? IMHO, one would have to be very foolish to use imagined payout percentages (or even real payout percentages) as the basis for using or not using AdSense, because the only numbers that really matter are eCPM (for comparison with other revenue streams) and total revenues.
>>> percentage of costs allocated to TAC (whatever that includes) has been about 77-78% through all the financial reports and is representative of costs allocated to the adsense distribution to the gross revenue of the adsence portion only.<<<
thanks visi, gross revenues is how i saw it also... there is no way that adsense is paying us 77% of what they take in.
Um, danimal, sorry, but "gross" means "what they take in." You've been arguing--without using the term--that publishers are paid from NET revenue, after various expenses are paid out.
As EFV notes, it was you who threw in the 33% number, which was not applicable, and now you are mixing up net and gross. It's been hard to discuss this issue with you, because you seem to selectively misunderstand numbers and terms to bolster your argument.
So I'll restate what the issue is: How much of Google's content revenues get passed through to the publishers? Is it 77% or are there any expenses deducted first? If I understand visi's statement, there may be some expenses deducted first, but he's not sure what they are, or how much they amount to.
By my reading of the Google SEC filings, they are reporting R&D separately from "cost of revenues" and separately from "traffic acquisition costs." These concepts are closely related -- "Cost of revenues consists primarily of traffic acquisition costs."
Another subtle point: Traffic acquisition costs consist of amounts ultimately paid to Google Network members, as well as to partners who direct search queries to our web site.
In other words, part of the reported total dollars expended on TAC is related to revenues that Google generates from its own sites.
As to whether any of this matters, I agree the primary issue is whether google is paying enough to justify giving them use our our real estate.
However, the percentage split is not irrelevant. If indeed the percentage is 60% or more for small publishers, despite the fact that Google could probably get away with paying most of "us" less, that suggests Google is taking a long term view of the market, and isn't simply exploiting its market power for short term gain. It also would suggest that "we" won't see any big increases in our share of the revenue, or big increases in our eCPM, even if Yahoo and MSN were to offer a larger revenue share in an effort to attract publishers away from google.
lol... this is indeed the crux of the issue, as i have pointed out many times already... and i'm sorry if i confused you earlier, o.k.? lets just leave it at that for now :-/
you first need to understand exactly where that bogus 77% figure came from, here is google's gross income from visi's link:
798,573 Google network web sites(publishers)
628,941 Traffic acquisition cost
628,941/798,573=78.7%
THE 77% NUMBER IS TAC, *NOT* WHAT GOOGLE PAYS IT'S PUBLISHERS... lol... the nytimes article wrote it up all wrong, and that *&^%! with a blog didn't bother checking the math before she posted it... if you read the feedback on her page, you'll see that someone pointed this out... here is the nytimes quote:
"Google.com and the company's foreign search sites contribute more to Google's bottom line than AdSense, because for every dollar the company brings in through AdSense and other places that distribute its ads, it pays roughly 78.5 cents back to sites like Digital Point that display the ads."
now do the math:
798,573 Google network web sites(publishers)
628,941 Traffic acquisition cost
--------
169,632 left to pay google's profit, google's expenses, and adsense publishers.
are we all on the same page so far?
i was wrong to put "adsense publishers" in that last line... plus, don't *both* adsense publishers and adsense partners get paid out of tac, right? which would mean that i might not have been technically correct in claiming that we got paid out of the net adsense revenue.
the problem is that we don't have a clue how the tac is split up, as i pointed out when i quoted industry sources earlier in this thread.
again, sorry for the confusion, these are the true facts, lol.
plus, don't *both* adsense publishers and adsense partners get paid out of tac, right?
AdSense publishers = AdSense partner sites
the problem is that we don't have a clue how the tac is split up
Of course we don't. There are tens (hundreds?) of thousands of AdSense publishers/partners, so how could we?
Also, how is that a problem? Would you want Google to list your (and everybody else's) individual monthly payments on the Web for all the world to see?
